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Fixed or Variable???

Discussion in 'Personal' started by RKM, Nov 1, 2011.

  1. RKM

    RKM

    Our Fixed rate ran out last month. We are currently saving £130.00. I'm on Maternity leave as well, so its a bit extra to put by for later.
    I just wanted to know, should I stay on the variable for the next few months or should I look for a fixed rate???
     
  2. We're on a 3 year tracker. Our IFA said that the base rate will rise eventually, but he didnt see that happening for a couple of years and it would rise very slowly as they wouldn't want to upset the economy too much.
    Its worth finding out what 1% rise would add to your payments (even though it will go up 0.25% at a time, I was told) this helped us decide to take the risk.
     
  3. jubilee

    jubilee Star commenter

    If you save money and decide to reduce your mortgage debt, take care when you pay off a lump sum.
    read the small print of your mortgage. With some, they only deduct the extra payments from the loan (and from the interest charged) at a specific date (usually 31st December). In that case, you'd be better putting the extra money ina savings account or an ISA , getting interest on the money, and then using it to reduce the debt a couple of weeks before the designated date for recalculating you mortgage payments for the next year.
    I have a tracker to fund my rental property. I took it out a few years ago with ING and it's an incredible 1.39% above the Bank of England Base RATE, so we're currently being charged just 1.89%! There's no way that I'm going to reduce the debt as I can get more than 1.89% after tax for savings.
     
  4. if you're worried about rates going up, choose a tracker which doesn't tie you in for too long. If you can find a good deal on a fixed rate then that might be the answer. keep an eye on what the bank of england say about rates - they will change, but you normally get some notice. review your mortgage every so often.
    you're the only ones who can decide how much risk you want to take...
     
  5. I've been on a variable rate for about two years since my fixed rate finished. With interest rates being so low at the time I was advised that it was the best thing to do. However, I think it's about time to see somebody to find out whether this is still teh case - interest rates have to go up at some point! I'd be interested to see what your financial adviser says on Saturday - will you let us know?
     
  6. Personally, I think it very unlikely that interest rates will go up for at least a year, if that is any help.
    You can always go to a fixed rate later.
     

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