BOE looks stable for the time being…

http://www.theguardian.com/business/2014/dec/17/bank-of-england-divided-interest-rates-rise-december-mpc-inflation

I’m currently on 2.39% lifetime tracker.

I’ve had a look at HSBC’s latest offerings and I can now get

a) 2 year fix 1.79% £27 saving a month £300 fee = £348 gain over 2 years
b) lifetime tracker 1.99% £17 saving a month £300 fee = £108 gain over 2 years
c) 5 year fix 2.89% £25 increase a month £499 fee = £1099 lose over 2 years

Which way would you go? I could stay put, but can’t see the fixes being this low for the foreseeable, i’m swinging towards b) just because it would take me another tier down to a better rate. Then if BOE goes up by 0.5 i’m back where I am now.

I’d go for option A. Rates should start to rise soon – but maybe not! If rates did go up much you should be able to get a lower tracker at that time – when rates where higher I arranged a 0.49% tracker which I still have.

Why limit yourself to HSBC products? if you’re going to go through the hassle of remortgaging you may as well look at the whole market .

My view is go for the lowest lifetime tracker mortgage with the lowest up front fees you can find , I dont see interest rates increasing signficantly over the next few years (and it looks like the banks dont either hence the low fix rates now)

Do they not waive the fee if you are already a customer?

Option B, and (depending on fee costs) you can always move in the future.

Still a pi55-take with 0.5% BoE rate though.

b) lifetime tracker 1.99% £17 saving a month £300 fee = £108 gain over 2 years

also a life-time cheaper over your current deal

If you are comfortable on the current mortgage, even when factoring in rate increases of 1-2% then go for B.

A seems a bit short and could leave you re-mortgaging just when things are on the up.

edited last bit – get it now.

Interest rates can only go one way.

I used to work with a Guy who managed to get a lifetime fixed rate of 3.5% way-back-when – everyone said he was mad – then interest rates went to 12%.

Personally I can’t see any knee-jerk whole percent rises or anything like that in the near future – but who knows what might happen next year – unemployment is down, inflation is falling because of oil prices and almost nothing else – and oil prices effect the price of almost everything else and I can’t help but think this current downward trend has been engineered to put pressure on Russia.

I’d be very tempted by the 5 year deal, you won’t notice £25 a month, but it’s comfortably below the BOE ‘normal’ rate of 3.5%

go for option (B), the gov/BOE policy appears to be “low interest = recovery”

Very soon, global and domestic economics will demand that the Government starts “making” money as it becomes harder to save any more that through any more cost cutting, and reduced spend/taxation cause by falling oil prices.

Ask yourself how they might so that – after the election of course.

Simple economics – you’ve reducing all your spending at home until you can’t reduce anymore, yet you still need money to pay of that loan – how do you do it? You find ways to earn more.

Depending on your circumstance, there are some cracking 10yr fixes out there at the moment.

Unless you can get them to waive the fee I wouldn’t bother changing at all.

With any of the options its going to take a year before you realise enough savings to recover the fees.

We may see an interest rate rise in 2015, but I’d be very surprised if interest rates rose above 1%

In these situations don’t concentrate on what your mortgage payment would be, but the amount of capital you’ll pay off during the period. You’ll find you get some interesting results.

I used to work with a Guy who managed to get a lifetime fixed rate of 3.5% way-back-when – everyone said he was mad – then interest rates went to 12%.

We got a base-rate tracker in 2007, didn’t matter that since then no one could actually get anywhere near base-rate and most were remortgaging on 5% (now 3%), we were still on 0.5% 🙂

ive pondered this for a while and i ended up staying on my variable…..i would save 0.06% locking in for 5 years and dont see the point of a 2 year fix even at lower rates – as low as 2.79% as ill come out into the rates rising and lose any gains i made imo…..

How ever RBS will let me change mortgage in 2 days online if and when i feel that rates will rise….

mean while im continuing my overpayments.

on your current rate i would stay where i am….

also why are you looking at lifetime products then doing maths over 2 years ?

I think Carney is pushing to get rates up a small amount sooner rather than later. BoE have said the longer they wait until they push rates up, the bigger the shock as they’ll have to make a bigger hike.

BoE published a report last week saying their calculations showed that most mortgage holders will be able to survive a rate rise.
He made some other comment about not assuming there wouldn’t be a rate hike early next year
The stress tests this week showed the main banks will be able to deal with any bad debt if the housing market drops.
He’ll be trying to stop the housing market going pop (if it hasn’t already in London) and rates are a key tool.
I suspect all the calculations are showing that when rates do go up, there won’t be any significant systemic risk.
I suspect all the stories from BoE about rates going up have been to encourage people onto fixed rates. This means they’ll survive a rise in the base rate.
Keeping rates so low is encouraging misallocation of risk which could create another bust

All of which makes it more likely rates will go up than not.

Thanks for all the advice above, i’m still pondering this, and today HSBC/First direct have brought out some of the best rates in the market

“HSBC’s subsidiary First Direct has also launched cheap fixed-rate mortgages, including a loan fixed at 2.39% for five years. This is understood to be the lowest ever five-year fix, cheaper than a 2.44% deal offered by Yorkshire building society last year. “

http://www.theguardian.com/money/2015/jan/02/mortgage-price-war-starts-banks-cheap-ixed-rate-deal

2.39% 5 year fix, same rate i’m on now with the best peace of mind for five years, quite tempted. Other main alternative is the 1.99% lifetime tracker, but based on this slow but steady BOE rise, I think the fix could be the way to go…

i’d go a as I don’t like being tied into products for too long just incase circumstances change

IMO fixing is just betting.

IMO fixing is just betting.

It’s all betting, fixed or otherwise

No point fixing in for only 2yrs. When interest rates do start to rise it’ll be a longer term thing, so if you fix in for only two years now the rates will still be on the rise when your fixed term expires. It’s only worth fixing in for longer periods of time at this stage I think.

I’d just stick on a low variable rate for now where you’re not tied in with charges when you leave. If you’re not careful with fixed rate deals you just end up tracking the rate trend but with a lag. The trick with fixed rate deals is to get in when rates are low so you ride out the next intrastate rate bump. It would be worth fixing in now if you could get on a decent 10yr – 15yr deal right now, as rates are not going to be this low for some time to come.