Please advise - Fix or stay with variable

L

lexus

Registered User
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Hi all,

Im looking for some advise please/ partner and i bought apartment for 305K 3 years ago, mortgage currently at 275K and i managed to get NIB to accept a valuation on our apartment from July last year which resulted in us getting the Tracker rate for 60% LTV.

We were hoping to trade up to a house this year, but we just cant afford it at the moment.

So should we fix? We only just switched to NIB this month (after being delayed with them for about 6 months)

We would like to move in the next year if we can find a house we can afford and can get the price we are looking for.

any advise would be appreciated, thanks
 
If you may be selling the apartment next year and thus redeeming the mortgage it's not a good idea to fix, as you'll pay a penalty for breaking the fixed rate. Granted if you stay with NIB for your new mortgage, they may waive the penalty (see http://www.askaboutmoney.com/showpost.php?p=428591&postcount=5) but that ties you to NIB for your new mortgage for the new house, which may or may not be the best deal for the new requirement.

Liam D. Ferguson
www.ferga.com
 
Well, it depends really,

Are you finding that the interest rate increases are straining your finances as it is? If so, I would suggest fixing for a year. But the flip-side is, you may be penalised if you opt out within the year.

If you can afford to manage with 2-3 more interest rate rises in the coming months, and still have breathing space with your finances, I would suggest sticking with your tracker. Also, the LTV tracker rates you are on currently are much cheaper than the fixed, naturally.

If I were you, I wouldn't fix.

Thanks
 
lads thank you both for your advise, I think so we will not fix. while the increases are tough enough (saving for a wedding at the same time:rolleyes: ) theyre not crippling us so I suppose just try plod along until we can move.

I appreciate you both taking the time to reply, thanks a million
 
No problem Lexus. I'm sure you'll make the right choice. At least with the rate you're on now, you'll have more options.

Happy to help. Best of luck with the wedding preperations then. Thankfully I'm in my youth and won't have to worry about them for a long time yet!!
 
MortgageMate said:
Well, it depends really,

Are you finding that the interest rate increases are straining your finances as it is? If so, I would suggest fixing for a year. But the flip-side is, you may be penalised if you opt out within the year.

If you can afford to manage with 2-3 more interest rate rises in the coming months, and still have breathing space with your finances, I would suggest sticking with your tracker. Also, the LTV tracker rates you are on currently are much cheaper than the fixed, naturally.

If I were you, I wouldn't fix.
Click to expand...

Just curious why the advice not to fix?
Surely with more % increases coming down the track it would be of benefit to fix for 2 /3 years. Banks are offering good 5 year fixed rates.
Is there reason to believe that rates will drop over the next couple of years?
 
5 years is a long time as far as interest rates are concerned. Nobody can say for sure.
 
In any event, if the property is likely to be sold within a year the penalty for breaking the fixed rate would probably outweigh any potential repayment advantage conferred by having it.
 
LDFerguson said:
In any event, if the property is likely to be sold within a year the penalty for breaking the fixed rate would probably outweigh any potential repayment advantage conferred by having it.
Click to expand...


I missed that bit-but don't some lenders allow borrowers to avoid that penalty if they take out a mortgage on a new property with the same lender?

Of course this may prevent the borrower from shopping around to a certain extent.....
 
Best of luck with the wedding preperations then. Thankfully I'm in my youth and won't have to worry about them for a long time yet!!
Click to expand...

Im 26! hardly drawing down my pension yet like!

thanks for all the advise, I really appreciate it.
 
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