Fixed for 10 years or variable? Are interest rates going to rise due to this 'recession'?

Question

This the choice we have to make!

The fixed is actually £40 a month more.

A shorter term fixed is even more than that.

Answer 1

Due to the dramatic downturn in the current economic climate - there is a distinct possibility that we could see a return to previous rates of inflation. Currently the BOE's target rate for inflation is 2% - it is currently 3.8% the bank base rate is holding at 5% but due for another drop/hike come early August.

I remember the markets back in the early 90's and ppl were wishing for 10% - the rate then was 16/17% a huge amount of money to be paying - so the property market bubble burst but eventually it did build back up - this is due impart to confidence in the markewt place -  alot of repossions were taking place and eventually lenders started lending again. For the sake of £40 a month - I would say bite it.

A bit of cliche but variables can go up as well as down as they linked.

Answer 2

10 yrs is a long time to fix.i would try and go for a tracker mortgage.its much better

Answer 3

Rates are at historic lows. Take the fixed 10 year loan. I'm not very conversant on UK housing, but here in the States it's a debacle. And in large part because ARMS, Variable rates and other "fancy" financing gimmicks. Error on the side of caution.

Answer 4

always go fixed as one never knows

I am a mortgage banker in Tn & KY

Answer 5

don't get tied in to a 10 year fixed.

In a recession interest rates will go down to boost the economy, the only reason they're not going down at the moment is because inflation is high but that will filter out in a year or two if fuel prices stabalise and then the bank of England will need to boost the economy then so interest rates are likely to go down then.

But with the mortgage crisis, bank's are putting up their rates without the bank of england changing interest rates so it's your choice but i wouldn't get a fixed for longer than 5 years.