interest rate predictions 2008/9

Dan_Collins_2

texas_devil wrote: »

always have a tracker, and know where you are at all times.
get a fixed rate at your peril, keep your mortgage simple or you could and up in a fix just when you dont need it.
ignore the sales gimmicks

I think I know what you mean. However a base rate tracker is as big a gimmick as any!

If you really want it simple, then SVR!

Base rate trackers became the in thing because the BOE kept rates low. However once the BOE are forced to increase it to beat inflation you could be smiling on the other side of your face. A fixed rate gives ppl a good nights sleep, you can get burnt at the end, but then again if your coming out of a 2 year BOE plus .34% deal this year you will get the same problem!

Gorgeous_George

Lower rates will stave off many repossessions.

House prices will fall because of the credit crunch.

I think rates will fall to less than 3%. Yes, inflation will rise - but it would anyway.

Recession is around the corner.

GG

Treadmill

Gorgeous_George wrote: »

Lower rates will stave off many repossessions.

House prices will fall because of the credit crunch.

I think rates will fall to less than 3%. Yes, inflation will rise - but it would anyway.

Recession is around the corner.

GG

Inflation will probably go above 3% so would this mean that interest rates would be negative in real terms ?

paul_olivier

been offered a fixed rate 6.09% for two years, with the recent reduction in interest rate there is no difference between this and the BOE tracker we have been offered BOE rate +1.09%. think i'll go with the fixed rate.

dunstonh

paul_olivier wrote: »

been offered a fixed rate 6.09% for two years, with the recent reduction in interest rate there is no difference between this and the BOE tracker we have been offered BOE rate +1.09%. think i'll go with the fixed rate.

2 years is not a good idea unless you are moving in 2 years. If you can get yourself a 3-5 fix and take the worry away.

LillyJ

I just got a tracker (FTB) and we have already benefitted from the drop in base rate before we have even started paying it back! We got a good deal and it is now at 5.63%, which is cheaper than the fixed.

However, we have only gone for this as we are borrowing 100k less than the bank said we could afford and have very stable jobs that are pretty much secure even in a recession. We know we can afford it if interest rates go up, and my salary increases very quickly as I go through my training (will double in the next 5 years).

We went for a 3 year. I think the 2 year would put us in an awkward time in the credit crunch for remortgaging, but was a bit scared by the 5 year being FTBs who are unmarried in our early 20s.

If I was stretching myself I would have gone for the fix.

maveli

life tracker with with no exit fee is the one for the current climate. hsbc and norther bank got some good ones

michaels

I can see inflation with recession if the chinese/indian economies can use domestic demand to decouple for Europe/US/UK and maintain upward price pressures globally. Otherwise the options are mild recession/slow growth plus interest rates rise if the financial market problems do not impact the rest of the economy or big recession and low interest rates as the fall in demand will bring unemployment and demand reductions and reduce inflationary pressures

Dan_Collins_2

Keeping it simpler, while we have jobs we are ok. If unemployment grows the we will be in trouble.

I think 5 year fixes look good if you are a worrier!

Gorgeous_George

I think people should consider lifetime deals that are fully portable.

In five years time it is feasible that today's 75% LTVs are 100% or more. Fixing for 2, 3 or 5 years is short-termism and could be storing up trouble for the future.

GG