Future predictions please
I'm deciding between a 2yr and 5 yr fixed rate mortgage at the moment. the 2 yr is very slightly lower, but I'm wondering about going longer term.
Basically if I go for the two year deal will interest rates be at a similar level when that comes to an end, and then go for a longer deal
Or do I go for the 5 year deal and watch smugly as rates start to rise in the next year?
Short and medium term interest rates should stay low. BUT... As all of this QE is doing little for the economy apart from devaluing money, and considering the inflationary effects of QE and commodity prices, the long-term outlook for interest rates is OH MY GOD!
We're still living in a fool's paradise, believing that the central banks have contained the crisis of '08. They haven't. They've just changed the form of the crisis. What the BOE, ECB and the Fed are doing is unsustainable, we just haven't realised it yet... All unsustainable bubble burst eventually, and when they do, the results aren't pleasant...
Who knows. But I've been on a base rate tracker for 5 years now and it's saved me a fortune.
Be very surprised if we get a rate rise next year. More likely to get a cut if inflation stabilises. Worst thing they could do is bring through base rate increases too early and kill off any hint of recovery.
Whats the break period on the 5 year fix?
A cut? How can you go lower than 0.5%? No, the mortage lenders will extract what they can from you... Inflation has to be controlled or it's Weimar Republic time again.
Don't forget it's not just the interest rate, but the fees as well. The arrangement fees of having two 2 year mortgages compared to the fee of one 5 year mortgage might negate the interest rate saving especially as the fees seem to be ever higher.
25bps......for the good that it will do which is approximately naff all.
Agreed inflation has to be controlled but i would bet that they will let it get on the verge of what they perceive to be out of control before they lift rates, particularly if inflationary pressures are imported.
Who knows. But I've been on a base rate tracker for 5 years now and it's saved me a fortune.
+1 😀
Need to add everything up, fees/total cost/attitude to risk etc.
I fixed for 5 years at 2.99% with no fees that will take me to the end of my mortgage.
Don't think anyone is going to offer me a much better deal.
Cue 1% mortgages becoming the norm in the next few months.