tommie21: recommend you stay with your current provider and when the b.rate starts to raise then you should act sharpish and look around.

You can be sure that by the time the base rate starts to rise the lenders have most likely addded 0.25% - 0.50% and maybe even 1% to their new products which will definitely be released before the BoE adjusts any rates.

Interest rates are already starting to rise on mortgage products, mainly because of the additional turmoil in the European countries but i think that the rates we had 2-3 months ago are the cheapest we are going to see for many a decade to come. If you want to ensure the very best rates that you can get then I think that now is the time to jump and not in 6 months to a years time when they will be higher....maybe only 0.25% to 0.50% but I just don't think the rate is going to reduce again anymore

good advice there again zeb!!!

i think i may have confused the question on fixed rate mortgages by the way i worded it though; i was wondering if the fixed rate products offered by lenders where affected by BOE base rate rises? i.e. would the lenders revise the fixed rate deals they offer if there was some movement on the base rate and, if so, is there generally an increase or decrease in rate?

for example:-

base rate = 0.5%, current lending - fixed rate at 5.00%

base rate = 1.0%, future lendining - fixed rate 5.50% or fixed rate 4.50%

would an inrease in base rate see an increase or reduction in the rates offered on fixed deals?

i hope this poses my question better and would be grateful for some more advice.

cheers

l

Can't see the 3.99% rate you are talking about. The only thing you may be looking at is a remortgage that is a 3 year fixed rate at 4.99% and then onto the variable rate which is currently 3.99%. This is listed as the top product in the 90% range but the rate your mortgage will intially be based upon is 4.99% and not 3.99%

The only thing I can see in the "low deposit" tab is a 4.19% 2 year fixed (still better than the product I quoted). What would concern me though is that you would not be placing a deposit but using equity to decide your product...although they are much the same thing they are used for different products. The only difference would be that you would use a deposit to buy a house and so would use it on a purchase mortgage where as you would use the equity in your house to remortgage and I think that the products in the Low Deposit tab are for purchase only and that will make a big difference....if only for the associated fees to be paid.

Quite often you will find that the same product is available for remortgage and purchase but the only difference will be that the lender will often pay for the legal work and for a valuation as part of the package where as for a purchase you will normally have to pay for this yourself, all told it will likley save you around £700 - £1000 for a remortgage over a purchase for exactly the same product.

To answer your other question. Fixed means exactly what it says. When you fix your rate it remains at the same rate from start until the promotional period is over....ie. 2 year fixed, 5 year fixed. During this time if you have a rate of 3.99% then your mortgage will be charged at that rate.If there are interest rate rises and the rate goes sky high, your a winner, if it drops you stand to lose out...it's the risk you take but it is the safe bet if you are watching the pennies so that you can control your budget knowing exactly what is going out eagh and every month for the next 2 or 3 or 5 years depending on what period you opt for.

Be aware that the longer you fix your rate for the higher it will be. 2 year rates are always the cheapest rates.

Good Luck.

hi zeb

thanks for taking the time to drop me a note...

this may seem a daft question but what generally happens to fixed rate mortgages when the bank of england base rate starts to rise? (it has been at 0.5% since i bought my house). do fixed rates go up in line with the base rate or do they tend to fall as the lenders compete with each other?

there is a 3.99% fixed rate for 3yrs 90%LTV in moneysupermarkets 'low deposit' section; not sure whether i would be eligible for that or not....

all the best

l

Lewis:

i guess at 90% LTV my options will be fairly limited with regard to rates and lenders......

Yup!

I would say very limited but it will deopend on the valuation you can achieve on your property.

I think that if you have a 90% loan to value that you are going to be very lucky to get a fixed rate of less than 5% let alone 4%. If you are able to get a loan to value of 85% then you may just squeeze around 4% but you are pushing it.

From what I can see it looks like the best fixed rate at 90% is 4.59% with a £995 fee plus legals and valuation costs but you can get a discount rate for 3.99%.

For 85% you can get a fixed rate from around 3.35% with £995 fee plus legals and val fees

Personally, but without knowing your circumstances, unless you can be sure of getting the right valuation I would wait and see what the wind blows. If you are still cautious then go and sopeak to a mortgage broker who can fully assess and make suggestions for you based on the full circumstances and facts

howdy folks

looking for a bit of advice on what to do next...

as the 'subject' suggests my 2yr tracker mortgage with RBS (rate - 4.29% + base rate, so 4.79%) has just expired and ive now been put onto their standard variable rate which is 4.00%. obviously this means a slight reduction in my monthly paymen,t which is welcome but im relatively young, have a very high LTV (i think high 80's%) and an average income.

im not sure whether to hang fire on the variable rate for a while, keep an eye on the base rate, and look to fix if the rate starts to rise or take some independent advice and look to get another fixed deal asap. i looked on here and there was a 3.99% fixed deal available over a term of 3 years (i think with Leeds BS) for 90% LTV. i've also been offered a couple of fixed rate deals with rbs which are both over 4.00% (i think 4.39% and 4.69% with different arrangement fees).

i guess at 90% LTV my options will be fairly limited with regard to rates and lenders so wonder if it would be worthwhile grabbing one asap for security?

any help greatly appreciated.

all the best

l