fixed rate mortgage - should I change?

[Ewan S]

Hi,
I'm on a fixed rate mortgage for the next 3 years, and was thinking with the low interest rates at the moment, should I change? Or are they likely to go back up and it'll be impossible to go fixed again?

Any suggestions?

[scotal]

The simple answer to that :- it depends.
On the rate you ar paying.
The LTV. (Which is going to be affected byt eh true value of your home.)
The early repayment charge.

How lng you want to refix your mortgage for.


There will always befixed rates available, but who knows where the rates will be.

[npope]

Ewan S said:

Hi,
I'm on a fixed rate mortgage for the next 3 years, and was thinking with the low interest rates at the moment, should I change? Or are they likely to go back up and it'll be impossible to go fixed again?

Any suggestions?

If you have 35% down payment then I think it could be a good time to fix, you might get a 2.5 - 2.7 fixed for two years, you have to way up your penalty fee's and make sure its worth while.

[sleep envy]

npope said:

I think it could be a good time to fix, you might get a 2.5 - 2.7 fixed for two years

tell me where please

[bigmanteebs]

scotal said:

The simple answer to that :- it depends.
On the rate you ar paying.
The LTV. (Which is going to be affected byt eh true value of your home.)
The early repayment charge.

How lng you want to refix your mortgage for.


There will always befixed rates available, but who knows where the rates will be.

What is your crystal ball view of what will happen with rates in the next 1-2 years?

[sleep envy]

bigmanteebs said:

What is your crystal ball view of what will happen with rates in the next 1-2 years?

at 0.5% they're only going to go one way IMO

[bigmanteebs]

sleep envy said:

bigmanteebs said:

What is your crystal ball view of what will happen with rates in the next 1-2 years?

at 0.5% they're only going to go one way IMO

Very true, but how quickly i wonder?

[Dover Nige]

Rightly or wrongly I've just decided to lock into a ten year fixed rate of 5.1%.

It was with my existing lender so minimal hassle and fees, they let me out of one part of my mortgage which was 5.7% early with no penalty, their SVR was 4.5% (just dropped to 4%) and it means I'm paying a tiny bit more at the moment, certainly not a tear inducing difference. It's also portable if I decide to move.

I'm happy now in the knowledge that whilst I may be paying slightly more than the SVR at the moment (maybe a fair bit more if the rate goes any lower), then in a few years time when the rate (IMHO) is probably going to swing upwards, I'll still be paying 5.1%.

I think it was right for my circumstances.

[scotal]

bigmanteebs said:

What is your crystal ball view of what will happen with rates in the next 1-2 years?

For rates to drop a huge amount more, a real appetite for competition has to come back, and at the moment the lenders don't have that. There are people promising billions of new lending, but they aren't doiing it at silly rates.

Long term, there seems to be two camps developing.

1. When rates turn they will go up as quickly as they fell, and go further.
2. We have a Japan style decade of low rates.

In truth no one knows.

Personally i think there is huge political pressure not to raise until the next election.... vote winner and all that.

[bigmanteebs]

scotal said:

bigmanteebs said:

What is your crystal ball view of what will happen with rates in the next 1-2 years?

For rates to drop a huge amount more, a real appetite for competition has to come back, and at the moment the lenders don't have that. There are people promising billions of new lending, but they aren't doiing it at silly rates.

Long term, there seems to be two camps developing.

1. When rates turn they will go up as quickly as they fell, and go further.
2. We have a Japan style decade of low rates.

In truth no one knows.

Personally i think there is huge political pressure not to raise until the next election.... vote winner and all that.

Thanks for that. It appears that we are stuck until the banks decide to lower their lending criteria, but then thats what went wrong in the first place.
Im not sure how the banks can win in this situation?

[scotal]

bigmanteebs said:

Im not sure how the banks can win in this situation?

I don't think they can.
If they lend, people will claim they are being irresponsible
If they don't, people will claim they aren't "helping", or are profiteering.

[sleep envy]

bigmanteebs said:

Im not sure how the banks can win in this situation?

why should they 'win'?

maybe they should come to realise that they won't be making massive profits from mortgages for the forseeable future

[scotal]

sleep envy said:

maybe they should come to realise that they won't be making massive profits from mortgages for the forseeable future

They won't be making massive profits from packaging up debt and selling it on, but I think some of their margins are very profitable for them.

[sleep envy]

careful, you'll only start giving people silly ideas

[scotal]

you need two people for a trade mate, and i don't think there is two banks that stupid at the momoent.

(although I bet there is a couple of banks thinking about it.)

[bigmanteebs]

scotal said:

you need two people for a trade mate, and i don't think there is two banks that stupid at the momoent.

(although I bet there is a couple of banks thinking about it.)

You should only borrow what you can afford, simple.

[sleep envy]

scotal said:

you need two people for a trade mate, and i don't think there is two banks that stupid at the momoent.

(although I bet there is a couple of banks thinking about it.)

you get two types of people in this world: people who learn from their mistakes (the intelligent) and those that don't (the terminally thick)

IME there's more of the latter than the former about

[King Herald]

Dover Nige said:

Rightly or wrongly I've just decided to lock into a ten year fixed rate of 5.1%.

It was with my existing lender so minimal hassle and fees, they let me out of one part of my mortgage which was 5.7% early with no penalty, their SVR was 4.5% (just dropped to 4%) and it means I'm paying a tiny bit more at the moment, certainly not a tear inducing difference. It's also portable if I decide to move.

I'm happy now in the knowledge that whilst I may be paying slightly more than the SVR at the moment (maybe a fair bit more if the rate goes any lower), then in a few years time when the rate (IMHO) is probably going to swing upwards, I'll still be paying 5.1%.

I think it was right for my circumstances.

I signed into a 5% fixed rate, 2 1/2 years ago, for 7 years, and I have no real regrets. I'd like to go cheaper if I could, but no big deal.

I think most people on good deals are paying 3 - 4%, so it is no biggie paying 5%. If I dropped to 4% I'd be saving just £40 a month.

I asked on this very portal just last week, whether it was worth/possible changing. Most people pointed the early repayment penalties would probably outweigh the benefits, unless I got a real good deal for a fairly long period.

[npope]

sleep envy said:

npope said:

I think it could be a good time to fix, you might get a 2.5 - 2.7 fixed for two years

tell me where please

Sorry for delay, Woolwich 2.29% until April 2010

[scotal]

npope said:

sleep envy said:

npope said:

I think it could be a good time to fix, you might get a 2.5 - 2.7 fixed for two years

tell me where please

Sorry for delay, Woolwich 2.29% until April 2010

That's a one year fixed rate that ties you to a BRT @ 2.29 over Barclays base until 2012, with a 2% getout clause.

Nice lead in rate, not great after that.