Q: Myself and my girlfriend are about to buy a home but are unsure about which mortgage to get. We will work with a fixed rate mortgage, but we have two options:
Fixed for two years – the monthly repayments ￡ 700
Fixed for five years – the monthly repayments ￡ 715
Obviously the difference in repayments is not large, but if this is our first home, have We recognize that we must be extremely careful Initally financially.
Does anyone have thoughts on this?
Thanks
Look at what's happening in the US, they will be in recession in six months, UNLESS they cut interest rates. If they cut interest rates watch the dollar fall, watch gold rocket!!!
The yield curve is not 100% certain, but it is the most accurate guide you will get!
http://news.bbc.co.uk/1/hi/business/6106280.stm
China's built a nice US reserve!
I see Gordon made a free trade speech today:- http://business.guardian.co.uk/story/0,,1940654,00.html
Where do I get my gold ?
edit : http://news.yahoo.com/s/nm/20061106/bs_nm/economy_greenspan_dc
Kind regards,
Ashley.
as others have said if you see yourself moving within 5 years and are prone to an ERC then take out the 2.
as with every question on here, the decision is yours
If you take the 2 year fix, you will pay £360 more over the 2 years. I imagine after the 2 year period the lender will put you on their SVR, which is likely to be a lot more than you would have been paying.
So in two years you'll probably be looking to change lender, the costs for doing this are likely to be a lot more than £360 you would have saved by taking the two year fix instead of the five year one.
So interest rates 2 or 3 years forward will likely be significantly higher than where they are today, unless a recession occurs.
Cant offer expert advice im afraid, only been a home buyer for 3 1/2 years but I went for a fixed rate over 5 years for security. It worked too as I got it at 4.75% which is quite a good rate now apparently. Plus you'll find theres always things you want for your first place, so I'd say you dont want to be worrying every month about interest rate rises.
If I was buying 1st time now I'd probably go for a fixed rate again for 5 years, if you're fortunate enough to have spare cash each month or bonus etc pay that off the mortgage too so in the 5 yrs when you're hunting around for another mortgage you'll be looking to borrow a lot less
Good luck with the move
I read foreign banks were buying goverment bonds and this affected the yield curve.
Kind regards,
Ashley.
Ok, the are boosting short term rates, but with the long term not as high you would assume this foreign investment won't be as much in the future.
Look at what's happening in the US, they will be in recession in six months, UNLESS they cut interest rates. If they cut interest rates watch the dollar fall, watch gold rocket!!!
The yield curve is not 100% certain, but it is the most accurate guide you will get!
(Japan rate forecasts haven't changed that much in the last 6 months, but the Eurozone ones have).
Here's the interest rate projection (swap rates)…
Can you see the negative yield curve? A good indicator of a recession..!
It's still inverted?
I read foreign banks were buying goverment bonds and this affected the yield curve.
Kind regards,
Ashley.
Here's the interest rate projection (swap rates)…
Can you see the negative yield curve? A good indicator of a recession..!
Personally at a rough guess, I'd say interest rates are going to go up over the next 12 months, and will probably stick at that higher level for a while, then start dropping.
I'd love rates in 5 years time to be really low, as thats when our 5 year fix runs out and we have to get another deal sorted out ;0)
Fixed for two years – monthly repayments ￡700
Fixed for five years – monthly repayments ￡715
Obviously the difference in repayments is not huge but as this is our first home we are conscious of the fact that initally we will need to be extremely prudent financially.
Does anyone have any thoughts on this?
Thanks
In the short term it look like rates are going up but what that means
in 2 years time is anyones guess.
Any kind of a fix is a gamble as is i guess staying on a variable rate.
The key issue is affordability. When we moved a couple of years ago i took out a largeish mortgage so with 2 kids we wanted predictability and went for a 5 year fix.
If it were just us two its likely we may have moved again so under that circumstance we probably would have gone for a two year fix.
In short think about where you think your life is going and try to plan accordingly. Not easy i know but its all we mere humans can do.