Is it a dumb time to take a fixed rate for five years???!!

[ipanemagirl]

Am so baffled about what to do.... all financial advice just sounds like hot air now!

I've got a goodish rate with a relatively secure bank...

First Direct
It was 6.09% and was one of the most competitive when we were looking.
I know there may well be better rates in the coming years, but if you look at 6.09 in the context of historical range of interest rates it is ok i suppose
You can also sign up to their mortgages 6 m in advance which if I had known we could have got a much better rate around 5.6%
Have just checked their website and can't find any longer deals than 3 years
everything seems to change so fast
Personally found them very helpful and the way they present the offset mortgage means that you can focus on your finances on a daily basis.
Our old lenders C+G were absolutely useless

Can I ask a really stupid question? ( I know NOTHING about mortgages)

We are on a variable rate mortgage with HSBC- at the end of the term do we still have to shop around or can we stay on another variable with HSBC rather than look for another deal??

If you do nothing, then you will automatically slip back onto another rate(the name of which escapes me), it could be a lot higher though, so if you can shop around and get a good deal, it's probably worth doing, having said that, doesn't variable rate do exactly that and vary? so surely you won't be doing anything different? you don't have to change banks, I never have, though since the Woolwich went to Barclays, I could seriously be tempted away ~ I HATE Barclays.

DarrellRivers, thank you.

We have a First Direct offset mortgage too, and they have been pretty good. With all our savings in other FD accounts we don't actually pay any interest on the mortgage, only capital so that is great. The online banking side is great and really easy to mamage money and we've had no problems with their customer support either.

Tiredemma, give HSBC a call and ask what they can do for you. Then shop around (check out Saturdays Guardian cash section for a list of current mortgage deals) if there's a better deal you can go for that, or go back to HSBC and ask if they can match it. Don't forget to factor in any fees (and whether you pay them upfront or add them onto your mortgage and pay interest). First Direct offer good rates, but hefty fees. If you do nothing you'll automatically go on HSBCs Standard Variable Rate, so check out what that is too.

Or try a broker like London & County (I think they are called).

And check out moneysavingexpert.com who have a downloadable mortgage info-thingy. (technical term, I understand!)

thats the thing- HSBC are fab, we had a great contact there who put us onto a 'homestart' mortgage ( we would never have gotten on the property ladder)

We had three years at fixed rate (but interest only) and then two years at HSBC variable, we are quite happy to stay with HSBC on a variable ( our mortgage has gone down a few times- and we are aware that it can go up)

I qualify in July and our mortgage 'ends' in the same month, we should more than be able to cope with even a £400 hike in mortgage then (not that we want to of course!)

Our mortgage is also fixed for entire mortgage term- but fixed to base rate so rises and falls according to BoE- I am v v glad we did this rather than going for a quick cheap deal, as re-mortgaging seems such a nightmare for people atm.
Is with Britannia, but they may not offer it now. Had highish fees at the time, but not compared to what they are charging this year

tiredemma do bear in mind that the standard variable rate might be higher than your current variable rate. And they may (or may not)have other deals they can give you once yours expires. No point in paying out money if you don't have to.

We are currently on a 2 year tracker taken out 14 months ago because there were no decent fixeds around, having always previously fixed. fortunately for us in that time interest rates have only gone down.

can i recommend charcol to help you
found them fab

Can you elaborate a bit please popsycal?

they sre s broker - free of charge and whole of market
they were brill for us p- thoroughl6y recommend

EachPeachPearMum what you have described is called a 'tracker' (because it tracks the base rate i.e. goes up and down, always staying a fixed amount more than the base rate), not a fixed rate.

Thanks popsycal. Will look them up.

It isn't marketed as a tracker though- it is actually a 'flexible mortgage', the rate is just one of the perks. Was pointing it out as you wouldn't find it otherwise.
We can make overpayments of any amount without penalty and draw back what we overpay if we need to- essential for us as we were selling other property and having other investments mature just after buying in UK, and DH is self-employed on a highly variable income.

ipanemagirl do you have any savings in Building societies, as they often give discounted rates to customers (we got this too) or to certain types of worker- eg local govt, nurses, etc etc

i recommend mortgagemission.co.uk. fantastic service. not related to me, promise.

interest rates have to come down. There is a benefit to fixing but if you can afford fluctuation, short term rates are going south.

I read this article which explains the current state of the economy very well.

Read all the article but the second half is the interesting bit. They have also forecasted to avoid a serious recession and potential deflation that interest rates will fall to 3%
www.wwfp.net/weekly-articles/our-weekly-columns/recession--the-uk-economy.htm

also as far as a broker is concerned, use one that charges a fee. The rest will, by definition be motivated solely to sell you something, or they wont get paid.

Google fee

based adviser

or
award winning independent financial adviser

and you will not go too far wrong

Check out moneysupermarket.com and other comparison sites for a feel of what's out there.

Have a look at the remortgaging guide on moneysavingexpert.com. This will also explain what to look for in a broker.

Personally I like fixed rates as you know what you're in for - I think it's a personality thing! If it was variable I'd be constantly worried about what the bank of england was going to do next.