Mortgages again - We seem to have a few on this subject

stoofa · 21 Jan 2011 at 09:14

Right, I'm currently paying our lenders standard rate of interest.
We came out of a 2yr fixed term just as interest rates went through the floor and we've been enjoying this low rate of interest.

There are of course rumours of interest rate hikes coming soon and I cannot help feeling that once interest rates start going up.....well the sky is the limit.

Just had our yearly statement from our Building Society and at the same time they sent us information on their latest deals.
We are now at the point where we owe around 75% of the value of our house, so we can get some of the better interest rates.
The one that interested me the most was:

5yr Fixed at 4.49%

Obviously once interest rates start to climb then this deal I expect will also climb.
Is this sounding like a good rate of interest to people for a 5yr fixed term?
Do people feel that interest rates are going to climb up pretty high over the next 5yrs and 5yrs would be a good fixed term to ride out the potential issues?
Is now the time to be considering fixed terms, or have we still got another 6-12 months before the **** starts to hit the fan so to speak?

[TFU] Thegoon84 · 21 Jan 2011 at 09:22

Well i'm just coming to the end of a 5 year fixed rate of 4.25%, i cant wait to end it as i'm hoping to get a 2 year fixed deal of 2.5% starting next October.

Nobody knows whats going to happen with the base rate, its all a calculated guess!!!

That said who knows what the con's will do, I cant see them upping interest when nobody is buying, thought they were trying to encouraging people to spend

Pneumonic · 21 Jan 2011 at 09:24

I guess it comes down to personnel preference... I have always taken the view that as the largest monthly cost to the household it is better to pay a little more for a fixed rate to ensure a stable monthly budget.

krooton · 21 Jan 2011 at 09:36

Pneumonic said:
I guess it comes down to personnel preference... I have always taken the view that as the largest monthly cost to the household it is better to pay a little more for a fixed rate to ensure a stable monthly budget.

I agree, which is why we opted for the 3 year 4.8% fixed on our flat.

There was some way of calculating if getting a tracker was doable, seeing if your disposable income would cover percentage increase should things rise, but I don't remember the specifics.

stoofa · 21 Jan 2011 at 09:50

Thegoon84 said:
Well i'm just coming to the end of a 5 year fixed rate of 4.25%, i cant wait to end it as i'm hoping to get a 2 year fixed deal of 2.5% starting next October.

Nobody knows whats going to happen with the base rate, its all a calculated guess!!!

That said who knows what the con's will do, I cant see them upping interest when nobody is buying, thought they were trying to encouraging people to spend

Where are you going to get a 2.5% fixed rate deal?
I can only assume you are only borrowing around 50% of your house value at the moment?
But even so I'm not seeing deals anywhere near that at the moment, let alone going to still be around in 9 months time.

CraigN · 21 Jan 2011 at 10:01

im on a capped tracker for 5 years which is 1.5% above base rate so its 2% atm

with a cap of 5.99% if it does reach that within the 5 years then i will have had a long while at a lower interest rate but its a slight gamble but well its very cheap at the moment.

I also own 25% ish

dannyjo22 · 21 Jan 2011 at 10:08

stoofa said:
Where are you going to get a 2.5% fixed rate deal?
I can only assume you are only borrowing around 50% of your house value at the moment?.

Yeah it will be because of the equity in the house, I just got that from Barclays around 2.5%, 2 years fixed.

Django x2 · 21 Jan 2011 at 10:13

Thegoon84 said:
Well i'm just coming to the end of a 5 year fixed rate of 4.25%, i cant wait to end it as i'm hoping to get a 2 year fixed deal of 2.5% starting next October.

Nobody knows whats going to happen with the base rate, its all a calculated guess!!!

That said who knows what the con's will do, I cant see them upping interest when nobody is buying, thought they were trying to encouraging people to spend

What?

Do you actually think the end result will come down to the conservatives to raise interest rates? Nu uh, they'll be going up. The economy cannot sustain the increase in inflation which is almost 2% above what it ideally should be. Therefore, an increase is almost guaranteed by the BoE. I would say mid year, June / July, just as the nice weather starts to come and peoples feel good factor is on the up

mangobreeder · 21 Jan 2011 at 10:15

Lucero said:
What?

Do you actually think the end result will come down to the conservatives to raise interest rates?

The government does NOT control interest rates, the Bank of England does.

Inflation is higher then usual in part because of the hike in VAT.

Django x2 · 21 Jan 2011 at 10:17

Yeah, I know, as I said

[FnG]magnolia · 21 Jan 2011 at 10:23

Just for a bit of perspective, interest rates here are typically 6 - 6.75%.

You lucky gits

The Halk · 21 Jan 2011 at 10:38

The SVR is a BAD RATE, for almost everybody, almost all of the time.

You can switch to a lifetime tracker (assuming 20% equity) at around 3% if you don't want to fix yet.

If you want to fix at 25% equity then 4.5% is a good rate - assuming the fees are around £500 or less. If they are more then you'll need your calculator.