Are UK interest rates more likely to go up or down in the next few years? What makes you think that?
I have decided to take on a loan product at a fixed rate; with options being to have a fixed rate on it for either 2, 3, 5 or 10 years. Would you tend to go for the 10-year option, so you know where you are for the next ten years or maybe a shorter term, to prevent being tied in with no way of changing for as long as that? The total time of loan period remains the same - only the time for which the rate is fixed is being considered here
Answers:
I expect interest rates to go up. There is global competition for oil and gas; china and india grow hungrier for raw materials daily. higher oil and gas prices mean higher inflation. this means higher interest rates
HOWEVER
Although fixing the rate gives you undoubted peace of mind, the fact that you know that your mortgage payment is going to be the same, even if prices rise and, hopefully , your salary with them, the gamble is on rates falling.But they are so low now, that this potential loss, or downside, is so low compared to the potential upside, or profit, of not having to pay if rate rises are huge, I would be tempted to take the 5 year option and see where rates are at the end of that term. You could always shop around again after that.
Bear in mind that, in the last century, prices fell in 20 years, and went up in 80.
Your best option, if you can get it, would be to opt for a "cap and collar" mortgage. This means that yuor interest rate would be limited to rising by, say, 2 percentage points, and, it would be limited to falling two points also.
try googling it, or going to a reputable broker such as John Charcol.
Hope this has clarified matters for you
Up
We are a notion in debt abd the Bank of England intends to punish us all for borrowing so much money
I'd go for 5 years as we're due an election (cue justified rise in rates over the next few years) and some election promises (for decrease in rates)
up plainly as the market is starting to stgnate a bit and as you heard on the news more people are defaulting on there mortage payments and they will raise interest rates to keep peoples spending in check. Thats purely my opinion no facts just feelings
Crikey no, I would only ever fix rates for 2 years - what if they go down!! I expect rates to rise slightly ove rthe rest of the year, then drop again next year, and so on. It's all they seem to do nowadays.
Seriously though, unless you're on a strict budget, go for a variable rate. No fees or penalties, much easier and more flexible.
I don't know anything about the interest rate I'm afraid, but I do like kittens. They're so soft and furry.
Current evidence, statistics and forecasts would suggest rates will remain fairly stable over the next five or so years varying up/down by approximately one percentage point.
But who knows what the Bank of England will do - the last two rises have happened when I thought it was bad for the economy to rasie rates, but what would I know I'm only a small business owner, who has studied economics at A'level and has followed the market and economic data for some time.
Never tie yourself in for longer than 3 years. Life is to unpredictable and if you have a 10 fixed rate, it will be a small fortune to get out of it. 10 years is a lifetime in the mortgage world and why waste money, if the rates drop dramatically in a year or two, you are going to be paying twice as much for your house because you are tied into a rate for 10 years. Good Luck
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Answers:
I expect interest rates to go up. There is global competition for oil and gas; china and india grow hungrier for raw materials daily. higher oil and gas prices mean higher inflation. this means higher interest rates
HOWEVER
Although fixing the rate gives you undoubted peace of mind, the fact that you know that your mortgage payment is going to be the same, even if prices rise and, hopefully , your salary with them, the gamble is on rates falling.But they are so low now, that this potential loss, or downside, is so low compared to the potential upside, or profit, of not having to pay if rate rises are huge, I would be tempted to take the 5 year option and see where rates are at the end of that term. You could always shop around again after that.
Bear in mind that, in the last century, prices fell in 20 years, and went up in 80.
Your best option, if you can get it, would be to opt for a "cap and collar" mortgage. This means that yuor interest rate would be limited to rising by, say, 2 percentage points, and, it would be limited to falling two points also.
try googling it, or going to a reputable broker such as John Charcol.
Hope this has clarified matters for you
Up
We are a notion in debt abd the Bank of England intends to punish us all for borrowing so much money
I'd go for 5 years as we're due an election (cue justified rise in rates over the next few years) and some election promises (for decrease in rates)
up plainly as the market is starting to stgnate a bit and as you heard on the news more people are defaulting on there mortage payments and they will raise interest rates to keep peoples spending in check. Thats purely my opinion no facts just feelings
Crikey no, I would only ever fix rates for 2 years - what if they go down!! I expect rates to rise slightly ove rthe rest of the year, then drop again next year, and so on. It's all they seem to do nowadays.
Seriously though, unless you're on a strict budget, go for a variable rate. No fees or penalties, much easier and more flexible.
I don't know anything about the interest rate I'm afraid, but I do like kittens. They're so soft and furry.
Current evidence, statistics and forecasts would suggest rates will remain fairly stable over the next five or so years varying up/down by approximately one percentage point.
But who knows what the Bank of England will do - the last two rises have happened when I thought it was bad for the economy to rasie rates, but what would I know I'm only a small business owner, who has studied economics at A'level and has followed the market and economic data for some time.
Never tie yourself in for longer than 3 years. Life is to unpredictable and if you have a 10 fixed rate, it will be a small fortune to get out of it. 10 years is a lifetime in the mortgage world and why waste money, if the rates drop dramatically in a year or two, you are going to be paying twice as much for your house because you are tied into a rate for 10 years. Good Luck
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