mortgages and interest rates
 

Have to re-mortgage within the next couple of weeks. We've always played safe and gone for straight repayment fixed rate in the past but the tracker options currently work out as the cheapest monthly payment. The tracker would become even cheaper if we sign up quick and interest rates are cut further. Anyone got a crystal ball? :wonder:

Well base rate is already at 1% so it can't get much lower.

I'd be getting fixed rate

But aren't fixed rates still stupidly high because none of the mortgage companies will drop a fixed rate in line (or anywhere near) with base rate falls?

If offered wouldn't new trackers be capped and therefore pointless if they can only go up from 1% ? Fixed rates seem like a good idea if the terms are good.

Fixed seemed to start from 4.79% :cuckoo:

:lol1: silly money :lol1:

It is when you can get variable from 3.5%. Interest rates are more than likely to be going to go down again before they start going up (and when they do it will be very slow and drawn out) so why pay over the odds with a fixed rate?

Trackers (those still available) are also attracting very high fees now too.

Might be better saving the money and going for SVR. That said, how good the deal is depends on how much you are borrowing. Needs to be 75% or less of the property value to get a good deal.

5t.

Because it gives you a pre-determined monthly payment.

Building Societies have whole departments of analysts 'predicting' what interest rates are likely to do over the next few years, and then setting the rates for their products to ensure that they make a profit. You are unlikely to beat them.

Taking a fixed rate mortgage is not playing safe. The rate is high because it factors in the potential rise over the next x years plus a bit of margin.

Watch out for collars on tracker mortgages.

Do bare in mind that if you have a BoE tracker then it is governed by what the BoE does with regards to it going up or down. do check for a collar (%) - set by the lender which your rate (in most cases) will not go under even if the BoE rate does. If going fixed check what/if the collar is at the end of the fixed rate term.

Do remember that if not a BoE tracker then the rates are set by the lender and changes in the rates do not have to follow the BoE ates with regards to falls in the rates. These do not have collars as such because the lender ultimately has control of them

alternatively you could look towards something like this to insure against increases with all the hassle of remortgaging and fees.
Market Guard

I think you would have to be mad to opt for a tracker just now, okay for the next 6-12mths or so but interest rates will go up as quick as they come down. In October they were 5%, 3mths later they are 1 %

If BOE BR goes back to 5% and you are stuck on a tracker at 1-2% above, you'll kick yourself that you never fixed for 5yrs+ at anything below 5%. If there are no ERC you'll be paying a premium in set up fees etc

Anything below 5% in the longterm you have got yourself a good deal.

i got in just in the nick of time, got a tracker at .89% over the base rate with no collar, next time though i'll be looking for a fixed deal, think it is pointless going tracker now as they are sure to start going up again at some point in the future, when i dont think anyone can predict but it'll happen

Very slow and drawn out, they have moved 4 points in 3mths, there's nothing to stop gains of 4% in the next 3mths.

They will not drop lower than 1%, its pointless for them to do so as the last couple of drops have made no impact.

Only a certain few are gaining from this, savers are being heavily hit.

That maybe so but personally i'm far happier paying out less than 25% of what I was paying over a year ago when I took it out. I'd be massively worse off if i'd been on a fixed rate.

You really believe the economy could take such a hit in interest rate hikes? It would kill manufacturing/any part of the economy stone dead. Rises have to be slow, especially when coming out of a situation like we are in now. The recovery when it starts will be slow and on a knife edge. If you whack the interest rates up during a recovery you will go backwards very quickly.

Fewwww ,its a brave man who tells you what to do for the best at the moment .:Suspiciou
I dont see the point of a short term fixed at the moment .Why pay over the odds when the rates so low .Most Trackers are only short two /three year terms anyway so ,if you have to pay a fee up front it doesnt make sense to me to be honest .
If you are looking at locking in for 10 yrs or so for peace of mind then fair enough .
Its a tough call and depends how big your "Nuts" are to be honest .
Good Luck in whichever decision you make .:thumb:

But the fixed rate is already 4.79%. So you have to balance when the tracker will reach that value, and how much you 'save' in the meantime. If the predictions above about slow climbs in rates are correct then a tracker looks a good bet.

I think it will take a while for interest rates to go back up. The reason they have dropped so quickly is to try and help the economy and allow us to have more spare money to spend in shops. I think its going to take a good couple of years to sort out this financial mess. I'm sure things will get worse before they get better. In november my mortgage was £1300 a month its now £870. :D

F'in hell that is cracking! Best tracker rate I was offered was 2.34% over with £999 fee. Not sure about the collar.

As mentioned by others the fees are completely cynical. The deals at lower interest rates have higher fees and the higher rates lower fees so it makes sod all difference to what you end up shelling out. Most likely going to go for a 3yr fixed rate at 4.59% but with £999 fee! :eek: Can anyone tell me if there would be any advantage in going for a 3yr deal at 5.04% which has a fee of only £299. Monthly payments are clearly a bit more but its not putting another grand on the mortgage. This is all with the Halifax who we are currently with. I know I should shop around, but I'm self employed and don't currently want to go through my "income" (or lack of it:rolleyes: ) with another bank.

Going for the first 3 yr deal would save £70 per month on what I currently pay.

The obvious other problem is if you stick with a SVR or a tracker and the rate do start going up to fix you will could be paying 000's in fees to get onto the fixed rate as the banks will want to claw back some of the money that they are currently losing with the low rates.

It all really depends on if you want to be safe, or take a gamble, either way make your decision then live by it ;)

I feel rates over the next 4-5 years will be allot higher than we have seen in proportion to the drops we have had, maybe hitting 8%, who knows. I imagine there are far more knowing people on here I am sure.

I'm looking at a fixed rate at 3.9% with Woolwich at the mo. I should have more details next week from an IFA who is doing the work for me.

And if inflation starts to rise, as many predict it will, then the banks only real tool to fight that is interest rates. And put them up they will.

Yes put them up slowly. They can not go up as fast as they come down. It is not sustainable.