Fixed or tracker for next 5yrs?
Discussion
Fix at 3.89 or track BOE + 1.89%?
A few years ago it would have been an easy decision; tracker. But is it different this time? With inflation seemingly 'out of control' will rates really take off in 2 to 3 years time?
To break even, mean BOE rate will have to be 2% from Mar'11 to 5 years on.
We have agreements in principle for both products. Which way would you jump? We are on the fence and thesre rates are only held until 10:30 tonight. Opinions gratefully received!
A few years ago it would have been an easy decision; tracker. But is it different this time? With inflation seemingly 'out of control' will rates really take off in 2 to 3 years time?
To break even, mean BOE rate will have to be 2% from Mar'11 to 5 years on.
We have agreements in principle for both products. Which way would you jump? We are on the fence and thesre rates are only held until 10:30 tonight. Opinions gratefully received!
Edited by Radar Love on Thursday 16th December 19:26
we have chosen to keep with the variable (since 18mths ago) - first time ever done this as I think the rate will remain low for the short/mid future. We are also lucky that we are overpaying the mortg at an effective rate of 7% so it wont alter what we pay just the length of term left. But hopefully the low rates will beat the inevitable rise but hopefully not before we have paid even more off it capital.
superlightr said:
we have chosen to keep with the variable (since 18mths ago) - first time ever done this as I think the rate will remain low for the short/mid future. We are also lucky that we are overpaying the mortg at an effective rate of 7% so it wont alter what we pay just the length of term left. But hopefully the low rates will beat the inevitable rise but hopefully not before we have paid even more off it capital.
We've been overpaying too at equivalent of 5.5% and will pay down a lump of the capital when we remortgate. However, with a baby on the way and mindfull that rates may spike we are seriously considering fixing. Average rates over the past 25 years have been ~7% and ~4% over the last 10. The question is are they likely to average <2% over the next 5?Radar Love said:
Fix at 3.89 or track BOE + 1.89%?
A few years ago it would have been an easy decision; tracker. But is it different this time? With inflation seemingly 'out of control' will rates really take off in 2 to 3 years time?
To break even, mean BOE rate will have to be 2% from Mar'11 to 5 years on.
We have agreements in principle for both products. Which way would you jump? We are on the fence and thesre rates are only held until 10:30 tonight. Opinions gratefully received!
I think paying 1.5% extra as insurance for a 5 year security period is a great opportunity.A few years ago it would have been an easy decision; tracker. But is it different this time? With inflation seemingly 'out of control' will rates really take off in 2 to 3 years time?
To break even, mean BOE rate will have to be 2% from Mar'11 to 5 years on.
We have agreements in principle for both products. Which way would you jump? We are on the fence and thesre rates are only held until 10:30 tonight. Opinions gratefully received!
Edited by Radar Love on Thursday 16th December 19:26
If you are cash rich then it doesn't matter as much, but within the next 5 years rates are more likely to increase than not and thus reduce the premium you are paying anyway, but ultimately could go much higher. You only need a few rises and you're at break even.
apologies radar, i know this won't help you but for anyone else who is looking to re-mortgage just now;
i have just signed up to a fixed 2 year deal with RBS at 2.75% with no fees. (Loan to value at 60%)
in contrast my broker could only get 3.5% and wanted nearly £2k in valuation and solicitor fees!
seems for the moment, that going direct through the bank is the best way.
Ged
i have just signed up to a fixed 2 year deal with RBS at 2.75% with no fees. (Loan to value at 60%)
in contrast my broker could only get 3.5% and wanted nearly £2k in valuation and solicitor fees!
seems for the moment, that going direct through the bank is the best way.
Ged
gedi said:
apologies radar, i know this won't help you but for anyone else who is looking to re-mortgage just now;
i have just signed up to a fixed 2 year deal with RBS at 2.75% with no fees. (Loan to value at 60%)
in contrast my broker could only get 3.5% and wanted nearly £2k in valuation and solicitor fees!
seems for the moment, that going direct through the bank is the best way.
Ged
That's not a bad deal.i have just signed up to a fixed 2 year deal with RBS at 2.75% with no fees. (Loan to value at 60%)
in contrast my broker could only get 3.5% and wanted nearly £2k in valuation and solicitor fees!
seems for the moment, that going direct through the bank is the best way.
Ged
We are considering First Direct. 3.89% fixed over 5 years, £99 arrangement fee, 65% ltv.
Welshbeef said:
Why don't mortgage lenders have offers of decreasing cost to say 15% ltv or min £30k. A sort of stepped discount every 5 or 10% drops. That would hugely encourage paying down debt or really focus the mind. Plus as we effectively own a few banks what's to stop us.
The banks don't have enough money.You see, when they issue a mortgage they aren't doing it with the money they have from client savings but borrowing from the money markets. They borrow at set rates, so they can't offer you a variable product as their borrow rate doesn't change.
In the old days when they lent the cash they had in the bank then that product could work.
You'd need to build a structured product where the lending would vary and I can't think how you'd do that, but it isn't my bag.
I guess the only way it could be done is if they add a premium on top and it is that premium that can be reduced or removed as the debt is paid down but that would make the initial offer too costly to compete in the market place.
It's a good idea but I just can't see a mechanism on the other side.
I would also say fix. I reckon we're in for a fair old dose of inflation over the next few years. when interest rates are this low, there's only one direction they can head in.
I would also recommend to anyone that they give some thought to paying their mortgage off as fast as humanly possible - to the extent of making sacrifices in other areas if necessary.
Being completely debt free, living in a home that no-one can boot you out of is flippin' excellent.
I would also recommend to anyone that they give some thought to paying their mortgage off as fast as humanly possible - to the extent of making sacrifices in other areas if necessary.
Being completely debt free, living in a home that no-one can boot you out of is flippin' excellent.
Gaspode said:
I would also say fix. I reckon we're in for a fair old dose of inflation over the next few years. when interest rates are this low, there's only one direction they can head in.
I would also recommend to anyone that they give some thought to paying their mortgage off as fast as humanly possible - to the extent of making sacrifices in other areas if necessary.
Being completely debt free, living in a home that no-one can boot you out of is flippin' excellent.
Yes, I'll do that along with my fifth directorship.I would also recommend to anyone that they give some thought to paying their mortgage off as fast as humanly possible - to the extent of making sacrifices in other areas if necessary.
Being completely debt free, living in a home that no-one can boot you out of is flippin' excellent.
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