Fix now?

stoke_bishop

I'm on a tracker which runs for the next 25 years ish at 0.5% above base.
My wife is getting worried. Should we fix now?
We could just about afford the mortgage as long as the base rate does not go up by more than 2%.
My concern is that if interest rates start going up plus the credit crunch that we are suddenly not going to be able to fix.
Or, is the base right likely to remain the same (or fall even) during the length of the credit crunch.
Should I stay put on my tracker or fix.
Help me someone please

ronaldmacdonald

Nobody knows what interest rates will do. If you are at all concerned about affordability then fix for a shortish (2 years) period and then review. If you aren't concerned and can afford to gamble then tracker it.

chappers

If you are worried about the effects on you and the credit crunch the last thing I would do is fix for a short period, I very much doubt we are going to see a 2% rise anytime soon.Although the chancellor said he has written to the BoE saying it's primary target should be to keep inflation below 2%, so it is possible that, there may be small rises, personally i don't think they will be anytime soon.
But we are definitely in un certain times and world markets suggest from the way that the dollar is behaving against the pound and other world currencies that we may be following the US, and they are expecting yet another 0.5% drop from the Fed today.It's a difficult one to call and if I was you and security was my concern (and i wasn't planning on moving anytime soon)then I would be maybe considering a longer term fix.

How much is your mortgage, your gross income, how much is your house worth and do you have any outstanding credit debt and finally do you have any bad credit on your record.

stoke_bishop

chappers wrote: »

If you are worried about the effects on you and the credit crunch the last thing I would do is fix for a short period, I very much doubt we are going to see a 2% rise anytime soon.Although the chancellor said he has written to the BoE saying it's primary target should be to keep inflation below 2%, so it is possible that, there may be small rises, personally i don't think they will be anytime soon.
But we are definitely in un certain times and world markets suggest from the way that the dollar is behaving against the pound and other world currencies that we may be following the US, and they are expecting yet another 0.5% drop from the Fed today.It's a difficult one to call and if I was you and security was my concern (and i wasn't planning on moving anytime soon)then I would be maybe considering a longer term fix.

How much is your mortgage, your gross income, how much is your house worth and do you have any outstanding credit debt and finally do you have any bad credit on your record.

<<Sharp intake of breath>>
Joint income 70kish
Mortgage outstanding 250k on 335k property (75% LTV)
No bad credit rating
Currently on +0.5% tracker (5.75). Thinking about fixing at 5.29 FD or 5.09 S&S

Thanks

herbiesjp

I was told by S&S that the 5.09% deal was being pulled - could be wrong though

Treadmill

Personally I would stick with the tracker for the time being, The next interest rate move certainly won't be up.

stoke_bishop

Treadmill wrote: »

Personally I would stick with the tracker for the time being, The next interest rate move certainly won't be up.

Our major concern is not that it's bad to be on a tracker as such, rather that when/if the base rate starts going up again (who knows when) that we'll have a nightmare getting a competitive fixed rate. Will lenders still lend 250K for example at 4 times (roughly) salary etc?

chappers

stoke_bishop wrote: »

Our major concern is not that it's bad to be on a tracker as such, rather that when/if the base rate starts going up again (who knows when) that we'll have a nightmare getting a competitive fixed rate. Will lenders still lend 250K for example at 4 times (roughly) salary etc?

On another thread you say you worry if interest rates go up to say 8% plus the question you have to ask yourself is could you afford an extra £5-600 on your mortgage, if you believe that you can't and you are scared of an interest rise then maybe you should consider fixing, then the question you have to ask yourself is if you take a 5 year deal and at the end of that the rate is still that high what will you do.
You seem to be in a pretty mortgageable position at the moment and could probably even sustain a close on 20% devaluation in your property and still be able to remortgage pretty easily.
Do you have any credit card debt etc .if so I would concentrate on getting rid of that to free up some monthly cash to help you ride out any harder times to come.
Personally speaking I would sit tight at the moment and watch what is happening, you can always bail out if rates start to rise.Then if you want to fix then fix for a longer term 5 years min.
IMHO 2 year fixes are a waste of time unless you are planning on moving on soon after that.

Naughty_Sausage

Hi - this is my first post so be gentle with me!

I need some advice along the same thread as this.

Our mortagage deal runs out end May (currently on a tracker with Nationwide). We have 2 small children (age 3 and 1) and can manage our mortgage at the moment but it would not take much of a rise for us to struggle.

I work part time and only earn £13,990 per year and my husband earns about £24,000 per year. No credit cards, no store cards. Just normal household bills plus loans for our cars (2 of - £184 per month and £75 per month) and childcare. House worth about £130,000. Ourstanding mortgage is about £97,500.

We think that the time may have come for us to fix (possibly for 5 years). We kind of like the idea of staying with the Nationwide cos then we can take a mortgage break if something unexpected happens (car problems, boiler stops working, roof blows away etc)

What would all of you 'fountains of knowledge' suggest? We have no idea and so any thought would be appreciated.

Thank you

Naughty Sausage x

stoke_bishop

chappers wrote: »

On another thread you say you worry if interest rates go up to say 8% plus the question you have to ask yourself is could you afford an extra £5-600 on your mortgage, if you believe that you can't and you are scared of an interest rise then maybe you should consider fixing, then the question you have to ask yourself is if you take a 5 year deal and at the end of that the rate is still that high what will you do.
You seem to be in a pretty mortgageable position at the moment and could probably even sustain a close on 20% devaluation in your property and still be able to remortgage pretty easily.
Do you have any credit card debt etc .if so I would concentrate on getting rid of that to free up some monthly cash to help you ride out any harder times to come.
Personally speaking I would sit tight at the moment and watch what is happening, you can always bail out if rates start to rise.Then if you want to fix then fix for a longer term 5 years min.
IMHO 2 year fixes are a waste of time unless you are planning on moving on soon after that.

Thanks for the advice Chappers. If rates were 10+% in 5 years time then
(a) we should have a lower mortgage
(b) I should be earning at least 1K more per month by then

In view of these points, I'm not so worried about rates 5 years down the line. Just more worried about them for the next few years, and that's why I'm wondering whether I should just fix to take the stress away...

Cheers mate...

Naughty_Sausage

I am sorry - I have just realised that I have hijacked someone's thread!

Apologies.