Should I be fixing mortgage?

[nappydaysagain]

Currently on a repayment mortgage and paying 2.5% which is great but know this low rate can't last forever so wondering if it would be sensible to fix now. Current provider will fix at 3.5 with no fees for 2 years but also seen we could fix for 5 years at 3.79% weigh no fees.

Are there any financial experts around with any advice. Thanks

With not weigh

Are you on a tracker or SVR?

We were on a fixed rate until about 2 and a half years ago, then when the deal ended we dropped to what we are paying now (sorry is that a SVR).

who's that 5 yr fixed with? Too late now though; just redone ours at 4.19 for 2yrs

5 banks have raised their SVR this week. I would fix. The bank of england rate is not relevant when banks are trying to rebuild their balance books the svr is individual to teh bank and mortgage rates are going to be linked to libor again.

4.19 is v low why are you ?

3.79 is with HSBC. They said they have lower rates but they have high arrangement fees (appox £1000).

It depends on your circumstances and attitude to risk. Interest rates are historically low and not forecast to rise for a long time. However, lenders (as we saw in the news this week) are upping their SVR (Standard Variable Rate) because they're not making much money from people paying 2.5% etc. So, if your SVR went up another 1% or 2% would you be relaxed about that possibility and able to keep up with the payments? Or would you rather have the security of knowing that your payments, although a little higher, wouldn't be changing for a period of time?

If you go for fixed check if there are any penalty fees for early redemption or overpayment.

I would, I was looking at remortgaging to raise some capital and i wanted a fixed rate. My current provider was doing 3.49 for 2yrs and 3.99 for 3, however the 3yr rate has suddenly jumped up to 6.29!!!

I'd better sort it out quickly then.

Thanks for the advice.

It doesn't matter how long they stay at 0.5 becasue the bank of england isn't a bottomless pit for banks.This was an emergency situation and really only gold standard banks can borrow from them at that rate. They set their own SVR and need to build up their balance sheets so I think rates will rise across he board now and they will try and force people onto the svr at the end of their fixes or charge high fees.Just happened to a friend of mine she didn;t have enough equity to get another fixed rate so added 228 a month to her mortgage from may 1st! Def fix if you can

I will, thanks for the advice. We currently overpay on our motgage too, and have checked we'll still be able to do that up to a certain amount without any penalty fees.

So, on that basis, what about this?

The C&G Standard Variable Mortgage Rate (SVMR) is currently 2.50%.

Only applies at the natural end of an existing deal and if you originally applied for that deal before 1 June 2010*
Guaranteed to be no more than 2% above the Bank of England bank rate**'

Presumably LIBOR doesn't matter here? Having just come off a 5.09 5 year fix, I am enjoying a couple of hundred a month extra for me. We only have 9 years to go, and dh retires at 53, so in under 2 years, and I am loathe to fix, and find we are stuck. I'd ideally like a capped tracker, but C&G don't do them, and the thought of redoing the mortgage again, whilst abroad, with tenants in is yeuch.

Yes some banks offered these deals directly linked to the bank of england base rate I think nationwide did. They will be kicking themselves but nice for you!

I got panicked yesterday when a friends mentioned their company had upped the rate by 1.5% and he now had to pay £125 more per month. I double checked mine as I have literally this month come off a 5 year fixed rated and was worried they were about to go back up again to find that mine is linked to the Bank of England base rate, phew I'm with Nationwide. They have 2 base rates, the one i'm on which is 2% above bank of England rate and 3.99% which they can change. It depends when you took out your mortgage, if before a set date it's the good one, if after the not so good one. For a change i'm on the good side!!

Mortgages are a mine field

Yes there is the bank of england base rate and the banks own base rate

Mine is fixed & i know I am paying over the odds BUT at least I know what is coming out each month & I still live in the shadow of my parents struggling in the late 80's. Peace of mind is worth a lot to me!!

I'm the same as you Edda, on the SVR linked to BOE base rate as opposed to the one for mortgages taken out mid way through 2010.

We'd been on a fix for years RedHelen, but we have 9 years to go on the mortgage, not sure where we'll be when dh retires from the Forces, so fixing really isn't the best decision for us atm. Am enjoying the low rates whilst they last!

We fixed in Dec last year (moved house)

Got a 5 yr fixed with no valuation or application fees @ 4.79% with hsbc.

We only had a 10% deposit though, there are better deals out there for people with higher desposits.

I like knowing that - whatever happens - til Dec 2016 we know what the payments will be and they wont change. We can also - ha ha! - overpay each month too if we want to.

Scary, I was wondering about my C&G SVR - I know that banks have been moving them up and thought that C&G might do the same but I think I might be spared by fact that our fixed had expired in early 2010 and we might be on the guaranteed SVR - will check.

Have a look at their website and it will tell you. We'd had our fix since 2006, so fall into the SVR as opposed to the MVR category.

Individual mortgages have different SVRs so you need to check mortgage documents. Our SVR is based on BOE rate not banks own rate, therefore only increases when BOE increases.

We have just fixed. The rate is similar to what we were on (tracker), but we wanted the certainty as our mortgage is horrific. If rates went up by 2 or 3 % it would make a massive difference. In 5 years time, not sure what the situation will be, but at least I know we are fine until then. We are also mainly repayment and over paying slightly. so things should be more managable. And if DH gets redundancy, we'll be laughing (in the short term and from a morgage repayment situation).

Dh retires from the RN in 22 months, and we don't know where we'll be, so fixing not an option for us. SVR easier for the moment.

Lizcat - 2.5% for us on C&G SVR.