To ask if you're going to fix your mortgage because I can't bloody decide!!

(47 Posts)
PennyAsset Tue 02-Aug-16 11:35:16

Time for me to remortgage.
I have no idea whether to fix or not fix and if I fix for how long!
Worried about Brexit.
What's everyone else doing?

Babyroobs Tue 02-Aug-16 11:50:30

The problem is no-one can predict what will happen with interest rates. We had to re-mortgage 3 years ago and opted for a 5 year fix as all the 'experts' predicted that interest rates wouls only rise. They didn't , in fact they fell. We have just recently inherited money and have now paid off the mortgage ( had to pay a hefty early repayment fee). I think if you want the security of knowing exactly what you will be paying then you're probably better off fixing.

ginorwine Tue 02-Aug-16 11:52:03

Yes

HeyMacWey Tue 02-Aug-16 11:54:51

What's the actual real difference in £''s between the fixed and variable/tracker deals? Depending on the size of your mortgage it might only be £20 a month.

Are they less than your current payments?

If so, I'd consider fixing and overpay at the rate of current repayments.

How long have you got left on your mortgage?

nextchapterplease Tue 02-Aug-16 11:55:20

We have just fixed for five years as would rather be protected against rises as we figure they would have more negative impact then the potential benefits of rates dropping.
At least we know what we will be paying.

CaveMum Tue 02-Aug-16 11:56:33

We took out a 5 year fixed deal last year. We decided we'd much rather know what our monthly payments were going to be for an extended period of time so that we could budget and plan.

It all depends on how you would cope if there was a sudden jump in interest rates. Could you still afford to pay if rates went up to say 5%?

PurpleDaisies Tue 02-Aug-16 11:57:44

Yes-we're fixing for five years. It's a good deal and we know exactly how much we have to pay. We're definitely not financial risk takers and I'd rather pay a little more than we might otherwise for the security of knowing we can definitely afford the mortgage on my husband's salary (I'm self employed at the moment).

DoubleCarrick Tue 02-Aug-16 12:01:04

We fixed for 5 years last year but wanted to fix for 10. I figure that I'd rather know what I'm paying and interest rates are low at the moment so there's not much to lose by fixing. We will probably fix for 10 years in 4 years time

We fixed for ten years in October 2014. DH and I hope to start a family next year and we wanted to know for certain what money we would need to find each month so we could be certain what we could afford.
We may end up paying more, but it's a price we're happy to pay for certainty.
I think you have to ask yourself if you would be able to cope if the interest rates went up to 6%, 8% etc and assess how likely you think that might be.

gamerwidow Tue 02-Aug-16 12:01:38

I've just fixed for 5 years but actually I think the interest rates will stay the same or go down. I'm just very risk adverse and like the security of knowing exactly what I'm paying each month.

albertcampionscat Tue 02-Aug-16 12:02:01

Almost certainly not. Hard to see interest rates going anywhere for a long time. Not fixing has already saved us a small fortune.

We fixed for ten years in October 2014. DH and I hope to start a family next year and we wanted to know for certain what money we would need to find each month so we could be certain what we could afford.
We may end up paying more, but it's a price we're happy to pay for certainty.
I think you have to ask yourself if you would be able to cope if the interest rates went up to 6%, 8% etc and assess how likely you think that might be.

BikeGeek Tue 02-Aug-16 12:02:05

Will be fixing for 5 years and overpaying.

cece Tue 02-Aug-16 12:03:09

I like a fixed rate as it is easier to budget. Ask yourself if you could cope if the interest rates went up? How much of a rise could your budget allow for?

gamerwidow Tue 02-Aug-16 12:04:13

I've just fixed for 5 years but actually I think the interest rates will stay the same or go down. I'm just very risk adverse and like the security of knowing exactly what I'm paying each month.

PinkFondantFancy Tue 02-Aug-16 12:05:39

I always get tracker - if you fix that's all well and good but if rates jump during the fix period you're still going to take that pain, just a bit further down the line. Certainty for 5 years doesn't mean a great deal - what about if rates are twice that when you need to remortgage? Plus the arrangement fees on fixed rate are pretty hefty.

BikeGeek Tue 02-Aug-16 12:08:09

Bizarrely the rate for a 5 year fix was less than a 2 year tracker for us!

cexuwaleozbu Tue 02-Aug-16 12:10:24

The decision should not be based on a gamble about whether or not interest rates will rise because no one really knows.

The question should be: how close to break-even-point (or breaking point) are you in your monthly budget?

If you have a comfortable margin between your income and your outgoings and can afford to overpay your mortgage, then go for a tracker rate but set your direct debit to be a chunk more than the official repayment level. Then while interest rates are low you will benefit from the lowest rates and build up a good amount of payment ahead of schedule. If they do go up, you will already be used to the higher payments and it won't hurt too much.

If you are only just making ends meet then go for a fixed rate option as this reduces the potential breakdown in your financial health that could be triggered sooner or later.

PurpleDaisies Tue 02-Aug-16 12:10:43

I always get tracker - if you fix that's all well and good but if rates jump during the fix period you're still going to take that pain, just a bit further down the line.
Yes but you know a year in advance so you can plan for it. I'd give up tutoring and go back to working in a school for example. That's the bu difference.

LurkingHusband Tue 02-Aug-16 12:10:56

Bizarrely the rate for a 5 year fix was less than a 2 year tracker for us!

There's more risk to the lender with the tracker ....

AlpacaPicnic Tue 02-Aug-16 12:14:51

Like a lot of PP we fixed for five years quite recently. The way I saw it, there wasn't much room left for interest rates to go lower and DH and I both work in the types of jobs that have little to no chance of any kind of pay increase so we need to have a predictable amount to pay monthly.

Ilikedogs Tue 02-Aug-16 12:20:08

We are about to exchange on a house and have a tracker. We will revise in 2 years. Nobody can predict what will happen but we both believe interest rates will stay close to what they are now and have enough cushion to take that gamble.
We are a single income household so if it looks like my husband will change job and take a lower salary we will do a long term fix before he leaves his current job.
The 2/5yr fix was about £70-100ish more a month

Discobabe Tue 02-Aug-16 12:20:22

Same dilemma here. The current tracker rates looked very similar to some of the fixed rate deals when I last looked though. I don't think the rates will go up an time soon but with them looking so similar I'd probably err on the secure side and fix.

RedToothBrush Tue 02-Aug-16 14:02:25

We currently have low interest rates. This is a given. There is a 100% certainty of current rates against a much lower chance of them going up or down.

They MAY go lower. They MAY go higher. But ultimately interest rates can't go much lower, so savings are not going to be huge if they do reduce. The last Bank of England advice was that all mortgage owners should be able to cope with a rate increase of up to 3%. Which suggests that their worse case plans at the moment do not include the massive rises of the 1990s, but could include rises. The indications are that they will go down - BUT banks are not inclined to follow the BoE lead and I would suggest that at present, if banks are expected to be protected against crashes, then rates are less likely to go down as they need the money.

I don't think its about whether you are a gambler though. Its about what you can afford. And what you can't afford. Its about planning short term and long term. Not necessarily just for your mortgage.

I would also say to be mindful of what your future plans are. Are you likely to move within the term of your mortgage? How secure is your employment? (is there any chance you would be forced to relocate if you lost your job).

I would say if you have a fixed rate, I'd be conscious of when it finished as crap knows whats going to happen then politically due to the current Brexit timetable - and to plan for possibly getting stung by hikes then too. Build up a buffer against the possibility if you can.

If you are eligible for a offset mortgage and can afford to save, even a small amount, it is worth looking at. It gives you a better option than a normal savings account, by getting the interest against your mortgage (thus giving you more due to the effects of compound interest) or if interest rates do go up, would benefit from a increase.

Badders123 Tue 02-Aug-16 14:06:21

We fixed for 2 years last year.
Hope to fix again next year too.

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