To fix or not to fix?

[misstakenone]

hi all, just looking for some advice really. I am a little wary of fixed as got stuck of a 5yr deal before when interest rates dropped and ended up paying more than I should. I also think that banks will always win and have expert forecasters etc.
But.... Am quite worried about brexit and the effect it will have on the UK economy. Not alone in this i know!
I am a single parent on one income and have a stable job (public sector)but probable restructure at work in a couple of years. Children are late primary/ early secondary age. Have quite a lot of equity but am in one of the cheaper houses in my area so could not downsize.
Anyway just spoke to my mortgage company who said i could do a no fee 3yr fix for £441 per.month (2.04%) or 5 yr no fee fix for £445 on 2.09%. This compares to my current £425 per month 1.84%.So just after some advice really - would you fix? And if so then how long would you fix for? Many thanks in advance for your help.

You had a 5 year deal before and did not like it... so I would not do one that long again.

Your children are late primary/early secondary age so you know you are unlikely to move house in the next few years, you have a stable-ish job and it would probably help you budget to know what the cost will be for the next few years.

So personally I would fix for 3 years given that is the length being offered. I doubt even the banks know what rates will do in the near future, yet alone in a couple of years time. BoE Base Rate is 0.75 so 2.04 is 1.29 above base rate which sounds reasonable to me though I know nothing about the mortgage market right now, so do compare it to other lenders rates.

Personally I've just fixed my electric cost. I like fixed costs as then the market can do what it likes without me taking the rough with the smooth. Sometimes you win, sometimes you lose with a fixed approach but you can never tell until after the event so it's always a gamble.

Ive fixed mine at 2% interest for 5 years - my mortgage is minimal compared to some anyhow and quite frankly im also single and need to know exactly what im paying eveyr month

its a gamble - things could go down - but to me - if your happy paying x amount every month - and you sleep at night - its worth it!! :)

I've never done a fix
I always worked the fees out as more than the incremental interest difference
and UK base rates will not go above 2% in the next ten years

Watching with interest :)

I'm looking to do a new deal for my mortgage too OP and have been wondering about the fixed.

I'm looking at a 2 year fixed rate but feeling cautious

Its all about total cost
if the fee is greater than the interest differential
its a bad deal
and as rates will not go up
the fees need to be small

just playing around on my online account and looks like I would save £127 over 3 years on a fix, plus get £200 cashback and pay about the same. I guess the only risk is that interest rates decrease and then I would lose. But am more worried about a rate increase than saving money should they go down.So think I am going to go for it.

I've fixed. I don't think rates will go down. But I don't have a crystal ball...

tubs
how could rates go down?

miss
what are you measuring the saving against
and have you included the fee?

Just had literally this debate with my mortgage broker (LandC, I recommend them). I felt we had potentially lost out with our last 5yr fix. My adviser broke it down for me in terms of:
What we would have gained, had we been on a variable rate and benefitted from the lower rates faster (he actually gave me the numbers)
What we stood to lose, if interest rates rose in the next few years and we hadn’t fixed.
Put like that it was a no brainer for us. Small potential gain versus huge potential risk.
We’re fixing for 5 years!

I've just submitted it and done the 3 years. I felt 5 years is a bit too long but sods law dictates that's exactly when shit hits the fan in the economy! anyway shall see....

Rates will not go above 2% for at least the next 10 years
so unless your fix is below that, variable is cheaper

At a rate of around 2% they’re not going down

We fixed for the first time ever this time at 1.75% for 5 years. Always stuck to trackers as the fixes where less favourable.

So for me I’d fix.

Saying that we’ve now had a total change of plan and are selling and renting. 😂

I did a 3 year fix at 1.74% with a fee in the end. My payments actually go down as was on 1.84% before

I've gone for 5 years, a bit more expensive than 3. I did it because I'm happy with what I'm paying now and could afford even if I'd lost my job and was without one for a time and then getting a, lower paid one.

It also means not having to have to go through the process of getting another one for 5 years. I won't look at what it would mean if rates go down. I've agreed on a deal I'm happy with and that's that. Like you, it's less than I was paying, so a bonus.

We just fixed for 5 years in January

The 3 year and the 5 year were the same rate - only the 2 year was substantially less

@Ta1kinPeace. Please could you explain why you don't think interest rates will go above 2% for at least the next 10 years? Do you work in finance?

Didyousay
I am an accountant
but mainly I watch fixed rate long term government loans.
And back it up by loads of reading.
There are no drivers - either in the UK or around the world - that will push rates back up again in the near future.

There are fixed rate loans available with terms of over 30 years at less than 3%
and the lender will make a profit on that
therefore base rates will be significantly less than that

Thank you Ta1kinPeace. I've been reading up too. I'd be interested in your thoughts on this (re interest rates).
www.dosbods.co.uk/topic/5613-credit-deflation-and-the-reflation-cycle-to-come/

I've never heard of that site before
but the sentiments look very similar to housepricecash
which has been expecting disaster for at least a decade

the demographic drivers of inflation are gone
the economic drivers of inflation are weakening
the environmental drivers of inflation are negative

My reading is based around the economic and scientific press and linked advice
but its the science which is the strongest force against inflation

@Ta1kinPeace. Spot on, it moved over from the HPC website! I've been following the thread for some time. I think it's probably too extreme, but a lot of their predictions, over the last year, have come to fruition. Their views on interest rates are scary.

I got barred from HPC for querying their numbers
as they were relying on trend lines that the data did not support

the thing with predictions is that you notice the ones that work
and miss the ones that don't
(well studied with things like fortune tellers)
I got fed up with HPC when they became an echo chamber that did not look outside

It appears to have some very thoughtful well informed posters mixed with some vile characters. Very good point re predictions, which work and those which don't, I'll bear that in mind in future. Thank you.

TBH my favourite thread on HPC always used to be the most overpriced .....
but the narrowness of the world view
and the lack of the impact of world demographics and climate change became tiring
and those are the two biggest drivers of future economic growth or contraction