Nexuas

So has the base mortgage rate passed what you are currently paying? Most fixed rate mortgages are normally 1-1.5% above the base motgage rate, have the rates increased by this scince you started paying? If not then you are not really in the best situation (At the moment, although if the rates go up by a shocking amount then I will be the one with egg on my face?)

It is just that I am in the process of remotgaging as my Discount varible rate has just expired, and I have been offered a rate at 1.6% below the base rate, a fixed rate is say 1.5% above, meaning the rate needs to climb by 3.1% before I am worse off?

TelBoy

True, PC, but i'm not sure that applies to the housing market here, where the BoE have more or less advertised the fact that they'll keep pushing up interest rates until the housing market cools. It could end up being an expensive strategy (or at least the sacrifice of a more profitable one).

davegtt

So the BoE are gonna push up interest rates until the housing market cools eh? or crashes as what too many people are waiting for

TelBoy

Pretty much, Dave, yes. It's the major inflationary pressure right now. I'm sure they're not intending to cause a crash per se, but like all these things, it will probably be over-done to some extent and some property prices might fall more than they otherwise should.

ProperCharlie

Not sure, tbh. my rate is fixed at (afaicr) 4.98% until january 2008. it may not be the cheapest way overall, but the way i looked at it when i took out the mortgage was: i know what i am going to be paying for 5 years. i know that (barring catastrophic employment disaster!) i can afford to pay that much. when it comes to keeping a roof over my head, i would rather have the security of a medium term fixed deal than take a little gamble on a cheaper discounted deal.

imlach

A sensible approach.

With a fix of around 5%, your downside risk is small, but you've protected yourself from any upside risk (which is, in effect, infinite).

Should the base rate fall below 4% again, you may even be seeing some capital growth in your house as the buyers steam into the market again.

Almost a win-win scenario.

P1Fanatic

Similar to me - missed out on 4.59% by a few days so ended up with 4.99% fixed until July 2007. As boe rate is at 4.25% I cant see how you can go wrong with a fixed rate in the current climate.

Simon.