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My fixed mortgage is coming to an end next month.

famoi
by famoi 24 November 2009  |  Comments 3 comments  |  Love Love  0 loves

I have 2 choices to choose from. They are 1. to have another 2 yrs fixed at 3.99% with £424 charge saving about £359 or go for 3yrs tracker variable at 3.19% at present with the same charge at £424 saving about £482. My problem I am not how the base rate is goiing to be withing those 3 years if I decide to go for it. My question is should I take the gamble on the cheaper rate and hope it does not go over the 3.99% (fixed rate).

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Comments (3)

  • manzanilla
    Love rating 410
    manzanilla posted

    You have another option whch may or may not be a good one - you can stay on your lender's SVR. Have you asked them what rate you will be paying if you don't go for either of these two offers?

    manzanilla

    Posted on 24 November 2009 | Love Love  1 love Report
  • Swarbs
    Love rating 272
    Swarbs posted

    Hmm, future interest rates (pulls out crystal ball)... nope, even the crystal ball has no idea!

    Seriously, anyone who claims that they can forecast interest rates over the next three years is deluded, foolish, or over confident. In all likelihood, given how shafted the global economy is, and the amount of spare capacity in the developed economies, they will still be below 1.5% in 2012, and you will save money overall by taking the tracker. But by 2012 the rates could still be 0.5%, or they could be north of 5%, in which case your tracker would be a sobering 7.69%. The critical thing to ask yourself is can you afford that much of a rise? And are you a gambler? If you feel lucky, and have the cash to spare, go with the tracker - you'll probably save a couple of grand and feel pretty good about yourself. But if you don't have the extra cash to cover a potential doubling in costs, don't take the risk. Repossession just isn't worth it.

    Posted on 25 November 2009 | Love Love  0 loves Report
  • famoi
    Love rating 0
    famoi posted

    My lender, Abbey's SVR will be 4.24% if I decide not to do anything.

    Posted on 26 November 2009 | Love Love  0 loves Report

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