Should I fix mortgage now or wait a few months?

[1jan2020]

My five year fixed mortgage term is coming to an end in February. I’ve been offered a new rate by my bank that is hundreds of pounds more than I’m currently paying. Would you lock that in now or wait a few months to see what happens? Is there any chance mortgage rates could start coming down again by early next year or is that just wishful thinking?

I have 3 btl on lifetime trackers of 1.25 above base rate. About 17 days ago I got an offer of 4.03 percent 5 year fix. I have taken it as on 3.5 ATM but we all know it's going up again in November probably by at least 0.75-1.0 percent. I have asked for start date of November 1st as BoE meeting is on November 3rd. This rate is valid for 4 months for me but I am taking it. I rang my sister who has her fix of 2.0 percent out in January and was shocked to find she had not done anything. I helped her rush through documents with my broker and he found her rate of 4.89 for 5 year fix and she was only a week after me but in that time that was what lowest rate had jumped to. My advice would be to go to a broker and ask for best rate they can get you. 3-5 year fix seems popular. You can ask for a rate, get offer and have it as a backup. You get 4-6 months whilst offer is valid to decide whether to use it or not. If you do nothing you will end up on standard variable rate, which is always higher. If base rates are going to be 5.5-5.75 interest rates will be between 7 and 7.75ish. Act now.

Nobody really knows what will happen. My feeling is that they will peak sometime in the middle of next year.

If I was due to remortgage next year then I would probably just go onto the standard variable rate for a few months and wait for them to drop - but this is a gamble.

If you want certainty then a better option for you may be to fix for a short period (i.e. 2 years). You risk paying more than necessary, but that is probably better than the risk of not being able to afford your mortgage next year?

5.8 is pretty standard at Nationwide atm.

Depends on your lender and your LTV as the rates are lower as your LTV does down.

Have a look at what the valuation is on your house (it’ll be on your online statement or you can call and ask them)

if it sounds about right then stick with it. If is massively under what you think then you can pay the lender to carry out a valuation if you think you might be able to access a better LTV product by doing so.

We've just been offered 3.68 OP

How are you finding these rates @beststepforward and @delilahhey ? Our mortgage deal ends in July and I naively thought I couldn't do anything before October. Our LTV is good (48%) but I haven't found anything under 5%. Did you just apply early enough or are better options still out there? I need to talk to a broker I think.

@DoingJustFine that's a good rate if you are their customer! (Sadly I'm not!)

I would like to know this too! Where are you seeing anything with a 3 in front of it?

@nonono1 and @BendingSpoons we are with Halifax for our mortgage and they've offered us 3.68% (just before the new rates were announced so couple weeks ago) can't rem if this is for 5 years or 10 years but there was only about £20 difference. So we are thinking to fix for 10 years but not sure

Think the rates are more like 4.5% now

I've just read through this thread and omg this is crazy how the rate can change so quickly. I'm in Ireland and started the process of switching in May due to Ulster Bank leaving the country. Our current mortgage (rate 2.90%) due to expire Sept 2023 but €630 to break out last April so been on variable (3.2%) since June. We're switching to 2% hopefully when the switch is completed. I'm looking at the UK rates and panicking. So far Irish banks haven't passed on the new ECB rate to their variable rate customers as we were paying one of the highest mortgage rates in Europe before now. @1jan2020 I will take the rate for now and if it drops before your current term ends, you can renegotiate.

When is the base rate expected to go up again?

Even if rates don't raise further (I personally think they will) they won't come down again before February so you're better to fix now. Not sure if fixing for two years rather than five is an option for you? Or although not ideal paying interest only for two years and seeing how the land lies then.

You'll probably find you can reserve what they're offering you now ready for next Feb, but that you can back out of it at any time before then (if something better becomes available, which is unlikely tbh).

We fixed for three yrs with Halifax at 3.85, they had 5 and 10 Yr offers at 4.5 but I hope rates may have fallen back by then. Our LTV is 57% but Halifax's current valuation seemed high.

Am writing this for anyone contemplating an early switch.
out mortgage ends next year so we applied for a new mortgage knowing their would be a penalty.
the offer for the new mortgage stands for 120days. So we actually have until February to decide. Mortgage providers might have different offer periods but worth looking into..

5 year rates are much less than 2 year ones which suggests the worst will
happen inside 2 years. If you really can’t cope then see if you can go interest only for two years then fix then. But if you feel you need to fix then book in a product before the next MPC meeting as when they go up the cheaper deals disappear, you can book in up to six months in advance and you don’t have to take that deal if in 6 months the market looks calmer and cheaper.

Personally I'd wait a few months.