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Fixed rate (4.99%) v Tracker (BOE + 0.74) dilemma
owitemisermusa
Posts: 954 Forumite
Brainiacs,
Someone I know is faced with this dilemma.
He's been offered a 4.99% fixed rate deal with only a £499 fee but is also aware of a BOE + 0.74% lifetime tracker deal with no fees attached.
The fixed has options of 2/3/5yrs.
Big Q is this - with the US Fed Reserve slashing rates, the likelihood that it would be a similar path for the BOE seems worth taking a gamble on.
Any advice appreciated - a real dilemma.
Thanks,
OWM
Someone I know is faced with this dilemma.
He's been offered a 4.99% fixed rate deal with only a £499 fee but is also aware of a BOE + 0.74% lifetime tracker deal with no fees attached.
The fixed has options of 2/3/5yrs.
Big Q is this - with the US Fed Reserve slashing rates, the likelihood that it would be a similar path for the BOE seems worth taking a gamble on.
Any advice appreciated - a real dilemma.
Thanks,
OWM
Tough times never last longer than tough people.
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Comments
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Which lender is it with (the fixed)?0
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i think HSBC.Tough times never last longer than tough people.0
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I'm presuming the rate-matcher deal for existing clients coming off fixed rates - I'd snap it up.0
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If you look at what base rate currently is, and compare that to how much base would have to come down by to even match the 4.99 I think that gives your friend the answer they are looking for.
The FED has slashed rates due to crisis in the US - the MPC here are playing a delecate balancing act at the moment as big cuts would see inflation, which is already over target, to soar.0 -
If your friend can really get 4.99% fixed with low fee and no step or extended ERC etc I would grab it and for as long as possible, 1% cheaper than the tracker.I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Thought so, I'll let him know. Had a look on their site and I think ERCs do not extend beyond the term of the fix.Tough times never last longer than tough people.0
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it's probably been done to death but which is better 3 or 5 yearfix? Some uncertainty surrounding how long property will be held on to for. at the very least till selling is a viable option.....Tough times never last longer than tough people.0
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Ahem!
Bump!Tough times never last longer than tough people.0 -
owitemisermusa wrote: »it's probably been done to death but which is better 3 or 5 yearfix? Some uncertainty surrounding how long property will be held on to for. at the very least till selling is a viable option.....
That's a personal choice.0 -
Yeah you cant say without taking all lifestyle and risk preference considerations into account - but its interesting that at the moment I am finding more people prefering 5 year deals, than say a few years ago when 2 year deals were more popular. Funny really when you compare rates then and now!0
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