Tracker or Variable rate during recession?

E

eladnova

Guest
I wonder if anyone could offer some opinions about Mortgage options. I realise this is not a place for official advice...just looking for informal thoughts.

The first 2 years of our Fixed Rate Mortgage at 4.540 is up at the end of January and our bank is asking us wether we want to run with a variable or fixed rate. Variable at 3.750 and 2 yr fixed at 4.390

I've been happy enough on the fixed but our repayments over 30 years were about 1500 per month and am inclined to run with a variable now as the rates look better and have come down.

My big question is, with the 'current economic climate' yada yada yada, do you think variable rates are a better option for us and are they likely to stay low during a recession?

Many thanks
 
Go variable for now . If things start to change you can start looking again at fixing. There is a good chance ECB rates will fall again this week .
 
[broken link removed]

This suggests you could get 3.55% fixed for 2 years.

If the markets are correct though you'd expect the variable rate to be below this level for the next two years
 
After the next couple of ECB reductions, if fixed rates are very low I recommend fixing for 5 years. Never ever forget that rates can go up as well as down. Not everyone believes in fixed rates though. I like the peace of mind. 6 months ago (or thereabouts) on AAM we had people in shock when their fixed rates ended and they were offered the then current variable rate. This was a warning bell to people and I hope now that we've all been given a chance again with rates decreasing that people lock in. I could be wrong of course and maybe rates will go to 1 or 2 percent. Still 3 or 4 percent is fairly cheap.
 
Hi,

I think as Bronte says wait till rates stabilise and then it will be the time to go fixed - they won't stay as low as this for too long.

angela59
 
kkontour said:
You mention Tracker in the thread title,
Should that be Fixed or Variable...
Click to expand...

You're right of course - I meant FIXED or Variable. Thanks for that.
Unfortunately, I can't seem to change the thread title.
 
Anything under 4% is almost free money. I will wait for it to Stabilize and lock in.
 
A point of caution. Some people presently on a tracker rate may be looking at current fixed rates and think they are attractive. You should bear in mind that once you come off a tracker rate it is gone forever and when the fixed rate ends you are at the mercy of your lender.
 
i would say you are mad to Fix at 4.39% there is a rate out there of 3.55% variable which mayl lower after this afternoon rate reduction. Also i would expect the fixed fates to come down far below the rate you were quoted. don't let them force you into anything take the variable and then decide with a cool head. If you were on a 2 year fixed you should be moving onto a tracker of about 1.25% above the ECB. There is a 3 year fixed at 4.19% just released by Haven this morning. If you want to know more drop me a mail on [email protected]
Cheers,
Mike
 
Very good point there by callybags.
I would advise people not to come off their trackers now anyway. there is another rate drop expected in the second quarter of the year and that would be the time to fix. Also all the fixed rates at the moment will be changing over the next few weeks. The current rates do not take into account the drop this afternoon.
 
I would agree with Mike and Callybags, especially if you got one of the great deals (some as low as ECB + 0.55) - lenders are desperate to get people off trackers so IMO they will be offering some great deals on fixed rates over the next year, but if you have 30 years left on your mortgage you're not going to take a gimmicky 2 year fixed at the expense of losing out later.
 
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