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How long should we fix a fixed rate for given the current market?

Last post Mon, Sep 24 2007, 11:09 AM by Ian Baldwin. 2 replies.
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  •  Mon, Sep 24 2007, 11:09 AM

    Re: How long should we fix a fixed rate for given the current market?

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    I will throw my opinion in to the mix.  I feel that rates have topped for the time being.  Fixing a rate at any stage is not a bad thing if you are uncomfortable with risk.  If you are comfortable with risk maybe go for a no early redemption penaly product and asses the situation when the market has calmed down.
    • Post Points: 5

  •  Sat, Sep 22 2007, 9:38 AM

    Re: How long should we fix a fixed rate for given the current market?

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    Hi Nathan,

    I think if any of us had a crystal ball we'd be sunning on a beach in the Bahamas right now!! Interest rates depend on so many factors. Building Society variable rates are a reflection of the Bank of England rate but they are also influenced by Libor rates and executive decisions.  A lot depends on where individual banks obtain their money from, most use the international markets and with the case of the American market this has now had an effect on our economy. It gets quite complicated at this stage but the main factor regarding your question is your attitude to risk. If it is important to know what your commitments are each month then that would be a sufficient reason to fix your rate. If you are not so cautious and believe rates have stabilized and maybe fall, as many of us do, then the advice normally lies with tracker rates. Most products sourced over the years are for a 2 year period due to high penalties if your circumstances change. Have you had advice concerning your payments if interest rates do rise, and are they affordable? This is another assessment with your attitude to risk. My feelings are that over the next year or two that rates will fall again, this is based on predictions from a number of "think tanks" and this reasoning is discussed with clients to form a decision. It would not harm you to discuss what is available and it may be advisable to get more opinions on this matter, see a local broker who will have the ability to work out some scenarios for you. You will be able to make a more informed decision then hopefully?

    Regards

    Ian 
    • Post Points: 5

  •  Sat, Sep 22 2007, 7:59 AM

    How long should we fix a fixed rate for given the current market?

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    Given the current market uncertainty and relatively high rates right now. What would people recommend would be the best period to fix a fixed rate mortgage for?

     I have been offered a deal to stick with the YBS on 5.94% with and offset account which can be fixed for 2,3 or 5 Yrs.

    I'm not sure what period to fix it for? We do not anticipate moving within the next 5 years but like everyone - I would like to pay less for my mortgage and hence live in hope that within 2yrs rates would be lower and therefore I would save more by remortgaging within two years.

    Has anyone got a crystal ball or have a feeling what rates will do over the next 5years?

    Thanks

    ND

     
    • Post Points: 35