It’s re-mortgage time. I’ve been reading lots and I appreciate no one actually knows and if they did they certainly wouldn’t shout about it but based on collected wisdom of the Internet there seems to be a lot of consensus that rates are going up some time in 2015.

Lots of talk of it being a good time to fix but I’ve done a few calcs and I’m still considering a tracker as the numbers might still work out OK.

How quickly might they go up from this record low, it dropped pretty quickly but would it go back up so fast? Surely that would cause chaos so they’ll trickle up?

If I go for a tracker at a lower rate than I can fix I can over pay then in 5 years time I’ll be better off if the rates rises slowly, but worse off if they rise quickly. Head says fix and save the worry.

Please feel free to post this pic:

when they increase the base will generally move only 0.25% at a time, if it does that several times in succesion then that’s a whole lot worse than not. But yes, fix in for 5 years seems good, don’t worry too much about what you could have saved on a tracker as long as you’re comfortable with the fixed payments that’s what counts.

Just been through this: plumped for fixed over four years and upped payments as high as I could. Life is for living and yeah, I might lose out a few quid but I don’t have to concern myself with interest rates.

I doubt they’d go up that fast, or back to pre-crunch levels for a while. That said we just fixed for 5 years. Depending what sort of tracker you have access to you should consider how much rates have to really go up before you’re winning. For example a 2.5% above base rate tracker, or a 3% fixed, if rates go up 0.5% then you’re evens, if they go up 1% you’re losing.

We opted for the security of knowing what we’re paying and gambled on the unlikelihood of rates going down.

Given we’re in the run up to an election nothing ‘bad’ will happen for now. If the election is won with a majority and there is no need for a coalition then all bets are off IMO.

I can get a 1.5% above base tracker with £99 fee which is what makes it quite appealing. That’ll give me until rates go up 1% before its even and in that time I’ll be over paying.

Still liking the hassle free fixed approach, though 🙂

Of course you also need to consider, if you opt for a tracker now (presumably not a fixed term one) and rates go up, what kind of deal might be available to you in 2 years time? If base rates are at (quivers) 3%, your tracker is at 4.5%, a fixed rate might cost you more like 5%.

Have you spoken to a mortgage advisor? Generally I avoid them and their type (apologies for the sweeping generalisation) like the plague, but we spoke with a very nice chap last time.

Edit: if that tracker is available to the general public you’d have to wonder why it was so cheap – no free lunch and all that! I’d go for the fixed if I were you, but that’s because we did 🙂

Q1. How affordable is the current fixed?

Q2. How affordable will the tracker be at 3% base?

If the answer to 1 is very positive but the answer to 2 a bit of teeth sucking then go for 1. If 2 is still positive then I’d be tempted to hedge my bets.

I am currently on 1.2 above base but that ends in 2015. Even at 4-5% the mortgage on full repayment is manageable and the same as renting the place. If it didn’t end in 2015 I would stick with the tracker but as I am renting it out anyway now I will probably have to switch to a buy to let. Probably going to sell up though and just enjoy not having to worry about it for a while and look for somewhere nice to live myself (currently renting a bigger place than i own).