To ask if you would fix your mortgage right now?

[likeamother]

Fixed has previously always been a no brainer for me, and the security of knowing what I'm paying each month outweighs a slightly higher rate. BUT my mortgage deal is up at the end of the month and to fix I'll be moving from 2.49% to around 5.24% - and that's if I fix for 5 years. (I could fix for 2 years, at around 5.7%)

It's higher than the variable I'd automatically move to of 3.89% but my concern is if interest rates risr further and then I'd be in a jam, and if I fixed then the % would be even less favourable.

I've tried looking online but all I could find from Martin Lewis was that it might go down in a few months but of course there's a lot of uncertainty in the world and there are various factors influencing.

Has anyone had paid for advice recently about this kind of thing or is there anyone with knowledge around the mortgage market and rates please? I'm just wondering if house prices fall with recession, will the interest rates?

I'm a single parent and am really going to feel the extra £££ on my monthly payment, there's no other salary to shoulder the loss. But then I'll also really feel it if rates shoot up and I'm on variable! 😭

TLD;
YES - Fix mortgage at higher rate
NO - Chance variable for a few months then fix if rates drop

NO

No

I fixed but I sorted this out a few months ago and got a 10 year fix at 2.4%.
I think the mortgage rates will settle between 5-6% and don’t think they will ever come down as low as they have been.
I think you should wait and see but overpay as if you were paying 5.7%. So if they do go up you have got used to paying that amount but if they don’t you’ve saved yourself some money and knocked a bit off your mortgage length.

I wouldn’t fix at that rate particularly not for five years. No one knows what will happen even top economists. The economy has been very unpredictable recently and we’ve seen how completely unpredictable world events can change things. If there’s a long recession you’d expect rates to fall but it’s not certain. Current thinking is that rates won’t get to 5/6% as previously expected.

I think the suggestion of pretending the rate is c. 5% and overpaying/ saving the excess is sensible. I’d probably save it as it gives you a fund for mortgage payments in future if things become tight and savings rates are improving.

We have agreed a fix last week. Our current one ends in January. We opted for a 3 year fix at 4.74%. We went with our current lender as the affordability checks with other lenders would be an issue due to Covid affecting DH’s finances and accounts. We hoped for a better LTV as mortgage is relatively small and house recently valued by estate agent, lender is being very conservative. I’m not an economist but I see rate rises are inevitable and they will hold them for a while before gradual reductions but not to the lows we all know. We wanted to know what we would be paying and in 3 years we will be in a very different financial situation.

@fortheloveofflowers oh wow I really wish I'd known this was going to happen and done the same. It would have been well worth an early repayment charge. That's an amazing rate for 10 years!

That is a pretty decent rate at the moment @EcoCustard - did you negotiate with your lender? I have a good LTV and wondered if it was worth trying to push for a better rate with mine, though in an initital chat they said the lowest I could get was 5.24% and that was with £1k product fees (I won't do this, obviously!). Otherwise it's 5.39%, and I've found similar when searching other lenders - lowest is 5.24% which doesn't seem worth switching for, accounting for fees too.

I would absolutely fix.

We have had cheap money too long and its likely we will return to long term norms of 5/6%

There's a lot of chat about mortgages but im surprised people aren't also panicking about car finance. We've all been nicely weaned onto financing increasingly expensive cars every few years, those plans will rocket in cost as rates rise.

Thanks @Circe7 that's a good idea about saving as a buffer. It does scare me. The higher rate will wipe out half of what I can save every month which is already isn't a lot and obviously a bloody nightmare.

No don’t fix yet. If the SVR is only 3.89 go onto that

rates are slowly dropping with no need to rise - with energy costs through the roof and food rises this will help keep inflation down and mean the Bank of England doesn’t have to increase its rates anymore for the foreseeable

Rishi is very good with economics

so I say wait it out

yes it’s a risk but a worthwhile one

I fixed at 3.69 recently and actually regret it and wish i had stayed on my tracker (lifetime 0.50 over base).

We agreed and secured a fixed rate with a 3 month lead time to actually taking it. And went on to the SVR before deciding to fix. The original rate we agreed was lowered, so we went onto the new lower rate instead of the original agreed rate. I would do that - have the security of having a rate agreed, but sit on the variable rate for a few months while you see what the rates do.

Nobody can predict the future!
I think we broadly expect interest to keep rising for another year or so. In 2 years I reckon interest will be higher than now, but 5 years is harder to predict. Interest may come back down again but they might not. The main benefit of fixing of course is the set payment makes it easier to plan a budget, but it might overall end up cheaper not to this time?

That’s a great idea about having the rate agreed just in case

i meant tracker not SVR!!

Are you sure your SVR is 3.89 - that's very very low - that sounds like a tracker rate to me.

I'm intending to fix, prob for two years. Nationwide offering 4.84%.

I fixed for 5 years in October for after my current deal finishes in March and I was lucky enough to get a 3.52% fixed rate. Not sure I would fix at 5%+ for longer than a couple of years.

Keep in mind what it would cost to get out of any arrangement that is not SVR - some good tracker deals around, but make sure you know what it would take to get out of it before the end of the term

Following as my 1.99% ends beginning of March 😭😭😭

Yes it's 4.89 but discounted by 1% for current customers, so it is tempting. But I hadn't seen Nationwide's offer, that is better than anything I've found, thanks.

Could you do a product transfer (with your existing lender) onto a tracker mortgage, these usually have a lower % than the SVR, wait a few months and see what happens, before getting another fixed? We did this as mid-selling so couldn't fix and the tracker rate was lower than the fixed rate. It doesn't count as remortgage, ours was just a short online form

Ooh this is interesting. So if the rates changed in those months, could you renegotiate/cancel it?

E.g. if I agreed I'd fix in 3 months time at around 5.24% then rates dropped a little it could be reviewed before it started?

That was exactly what we did. With Nationwide. We agreed at 5.59 and paid a deposit, then fixed at 4.99.

Forgetting the might go up might go down scenario. You can afford the deal your being offered now? Yes? But not if it alters again.
I'd fix now knowing I'd be OK for the next 5 years.

Ours fixed at 5.85% years ago, then everything dropped to 2%.
Hindsight is a wonderful thing but what happens if you don't fix and it goes higher.

That's great, thank you!

Yes, that's very true. I think I'm just hyper aware of what a big impact losing that £££ will have on mine and DCs day to day lives - holidays, saving for when our old car packs in etc., rather than it just being a bit of a PITA but ultimately still very manageable like it might be for some others.

But you're right, at least I can afford the change, we'll still eat and pay the bills. But I massively begrudge it!