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Interest Rates And The Future

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Ok, I've found a house and need to arrange my mortgage. I'm having a dilemma as to whether I should go for a fixed or tracker. We plan to pay off the mortgage within 3 years ...5 years max. If all works out and we manage to keep our jobs! My questions:

1. What was the highest interest rate ever?

2. Is it likely interest rates will shoot up to silly levels within 3-5 years?

Thanks for any replies.

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If your going to pay it off in five years get a tracker. It will be cheaper and you'll be paid up quicker. With fixed rates you pay a premium for security, security which by the sounds if it you dont need. Or if your income is such that you can pay off a mortgage so quick, save like mad for a year or so and buy for cash. Save five years of interest payments.

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Ok, I've found a house and need to arrange my mortgage. I'm having a dilemma as to whether I should go for a fixed or tracker. We plan to pay off the mortgage within 3 years ...5 years max. If all works out and we manage to keep our jobs! My questions:

1. What was the highest interest rate ever?

2. Is it likely interest rates will shoot up to silly levels within 3-5 years?

Thanks for any replies.

If what you are saying is true...why don't you wait three to five years, invest your money then buy it for less?

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If you can pay the mortgage off as fast as that taking out a fixed may cost you. However to stand any chance of working this out you need to say how much you will be borrowing. The larger the sum it might be better taking a fix rate deal for 5 years just in case of big rate hikes.

You need to factor in what the current rate is and what it might increase too. If rates say shoot up to 8% a 5% fixed rate deal is going to save you money. If rates stay low and you take out 5% your going to pay out probably thousands you don't need to. Knowing what to do is difficult as it's a gamble either way. Predicting the future is impossible. If in doubt toss a coin.

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If what you are saying is true...why don't you wait three to five years, invest your money then buy it for less?

Honestly, we can't wait anymore. Been out of the property market nearly 10 years and we have a family now. Wife wants more babies and I just want to keep her happy now.

That was my gut feeling a tracker. Just scared rates will shoot up too quickly. And with Merv, dropping hints, it makes me wonder if he is warning everyone to fix.

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Honestly, we can't wait anymore. Been out of the property market nearly 10 years and we have a family now. Wife wants more babies and I just want to keep her happy now.

That was my gut feeling a tracker. Just scared rates will shoot up too quickly. And with Merv, dropping hints, it makes me wonder if he is warning everyone to fix.

I don't see rates going up soon. They should, but not with another recession on a knife edge. It's all talk from Merv, mainly to shut up the savers.

Don't Barclays do trackers that let you switch and fix at any time? Might be worth a look.

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I don't see rates going up soon. They should, but not with another recession on a knife edge. It's all talk from Merv, mainly to shut up the savers.

Don't Barclays do trackers that let you switch and fix at any time? Might be worth a look.

Thanks for that ...I'll have a look!

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I think the second dip is coming regardless of what they do to rates. When it does come, they'll whack the rates up, otherwise they'll be blamed for causing it in the first place.

They are all gutless pussies, after all.

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If it's only 3-5 years I would go for a flexible mortgage no problem with over paying and no problem if an unexpected bill comes in.

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If you have good enough cashflow to pay it off in 3 years then it won't practially make much difference. I'd got the the cheapest mortgage possible. Depends on your LTV there are deals for 2.29% floating around, and Norwich & Peterbrough will only charge you 2.59% with up to 80% LTV.

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Honestly, we can't wait anymore. Been out of the property market nearly 10 years and we have a family now. Wife wants more babies and I just want to keep her happy now.

That was my gut feeling a tracker. Just scared rates will shoot up too quickly. And with Merv, dropping hints, it makes me wonder if he is warning everyone to fix.

back-to-the-future-6-4-08-2.jpgif you can pay it off that quick, whats it matter ?

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Ok, I've found a house and need to arrange my mortgage. I'm having a dilemma as to whether I should go for a fixed or tracker. We plan to pay off the mortgage within 3 years ...5 years max. If all works out and we manage to keep our jobs! My questions:

1. What was the highest interest rate ever?

2. Is it likely interest rates will shoot up to silly levels within 3-5 years?

Thanks for any replies.

You may want to consider an offset where you are effectively paying off the mortgage but can still get at the money if you have an urgent need for it.

Otherwise, no point paying for the premium of a fixed, just get a tracker with no repayment penalties.

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Thanks for all the replies. Some really helpful responses.

0.5% ....the rate situation does matter because it's not going to be easy at all to pay off this mortgage, we're going to have to go without a lot over the next couple of years, but we want to be able to give our kids every opportunity at an age when they would start to remember things. That's the only reason we are doing this.

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Ok, I've found a house and need to arrange my mortgage. I'm having a dilemma as to whether I should go for a fixed or tracker. We plan to pay off the mortgage within 3 years ...5 years max. If all works out and we manage to keep our jobs! My questions:

1. What was the highest interest rate ever?

2. Is it likely interest rates will shoot up to silly levels within 3-5 years?

Thanks for any replies.

This (obviously) is really a question about your risk appitite.

A fixed rate is can be seen realy as an insurance policy. the higher rate you pay is basically an insurance premium against the risk of an un-knowable future event (IR going up).

Personally I never buy more insurance than I absolutely have to or are legally required to. The reason for this is that insurance companies have very cleaver well trained people working out how to make sure that they win and you lose from buying an insurance policy. You also have to lose to enough of an extent to pay the insurance companies running costs and profit to share holders.

This is even more the case within the financial services world where inside information means that other people are almost always making more informaed choices than you can.

If you value security enough to pay such a premium to insure yourself than go ahead. If not take the risk. (also bare in mind that 'homeowners always seem to be able to politically protect themselves from consequences).

If the last couple of years has tought me anything, it is that in our socialist democratic society being a part of the heard protects you as a political majority can vote (or at least lobby and pressure) to be protected at the expence of a minority who have protected themselves.

For this reason, when I come back to the UK for good, I'm buying a house. whatever the prices at the time.

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Honestly, we can't wait anymore. Been out of the property market nearly 10 years and we have a family now. Wife wants more babies and I just want to keep her happy now.

That was my gut feeling a tracker. Just scared rates will shoot up too quickly. And with Merv, dropping hints, it makes me wonder if he is warning everyone to fix.

BoE has two ways to influence consumer behaviour.

IR - if they go up people have less money to spend on sh!t

The Media - through what they way they influence expectations of future actions and therefore people's behavour

Personally I believe Merv is making these statements to intentionally create fear of IR rises despite them being a long way off. This way he gets some of the benefits of an IR rsie while still being able to keep the loose monetary policy that the economy thinks it needs.

I don't see him as the kind of guy who would honestly give everyone a correct warning without an alteria motive.

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If yu go for fixed, check the terms. Quite a few Fixed Rate Mortgages only allow for 10% overpayments per year.

Also look at the terms for paying off your mortgage early, some contracts charge a fee inside the introductory period, some even beyond that.

Might have already been said, as there were long answers I didn't read all the way through.

Whoever said the more flexible the better, listen to that guy. :)

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Thanks for all the replies. Some really helpful responses.

0.5% ....the rate situation does matter because it's not going to be easy at all to pay off this mortgage, we're going to have to go without a lot over the next couple of years, but we want to be able to give our kids every opportunity at an age when they would start to remember things. That's the only reason we are doing this.

Then you won't do it... life gets in the way of our plans.

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Then you won't do it... life gets in the way of our plans.

OP this is is sound advice. You've already mentioned that your wife wants more babies (plural). If your life is going to change that dramatically then is it realistic or even feasible to pay your mortgage off in the next 3-5yrs? If your wife works she may not want to return to work after maternity leave? Could you manage on a reduced income? Too many variables and unknowns. The suggestion about a flexible mortgage made sense.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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