Any thoughts on mortgage rates?

[Mortgage2024]

We are currently on a tracker, took it out just over a year ago when it seemed like the best option - knew rates would rise but hoped we could ride it out and the fixes were very high.

Anyway originally mortgage was about £600 currently £800 - we are coping but it is getting tight. If it goes higher we won't be destitute but will have to give up things that we love such as after school activities and eating out.

The bank is offering us fee-free transfer to a fixed product for 2 or 5 years, similar rates (5%) which would take the payment down to £725.

So the choice is

a) stick to the plan, hope boe rate doesn't go (much) higher and hope it comes down well below 5% in the medium term.

b) fix for 2 years. It's a rate we are reasonably comfortable with and hope it's better in 2 years time.

c) fix for 5 years - it's more than we'd hoped to pay over 5 years but less than it could be

Any thoughts? And don't worry, I know that MNers don't set the rates and don't actually have inside knowledge!!

I definitely wouldn’t fix for 5 years while fixed mortgage rates are currently falling and predicted to keep falling further this year and 2025. I would either stay on your Tracker rate a bit longer or fix for 2 years in the hope that by that stage rates will be quite a bit lower than they are now.

I think you might be me! Same scenario except I had to pay a mortgage fee for moving onto the tracker and I'll have to pay another one of £999 to move to a new fixed rate deal. So far, any short term savings on the lower rate have been below the fee that they would charge but with the latest rounds of rate cuts and get the ability to get a fix of less than 4% has got me considering it again.
If I needed the certainty of a rate and I wasn't charged a fee I would be very tempted. Personally I can't imagine rates dipping much lower than low 3%.
Following with interest!

Yeah I don't think we are much tempted by c). It's a gamble either way with a) or b). I might hold on until the next rate decision which I guess is early Feb.

We've just fixed for 5 years at 4.79%. But, we have a small mortgage now, so not as impacted upon by rate changes. Rate changes in Feb, and our payments will go up by about £40 a month.

Yes the next Bank of England meeting is February 1st. Some people think their rate could fall to 5% then but most think that will happen a bit later in the year. Could be worth waiting to see.

I’d do the fee-free 2-year fix now, I think. That’s £75 a month back in your pocket. How much do rates need to fall to make back £1,800 over 2 years? Do the maths on that and then decide.