Archive for August, 2010
5 Year Fix Looking Attractive
Monday, August 23rd, 2010
There are now 5 year fixed rates available for a little over 4%. This represents just a 1% premium over a 2 year fix.
All things being equal, I can see very little reason not to opt for a 5 year fix over a 2 year. After 2 years, rates will almost certainly be a fair bit higher than they are now, so the 5 year fix will prove good value over the term.
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Tracker or Fixed Rate
Wednesday, August 18th, 2010
The biggest question most lenders are asking is whether to get a fixed rate or a tracker mortgage – and there is no clear, easy answer!
The economy is still relatively weak and the Government cuts will only depress demand in the short-term, but on the other hand inflation remains high and is not dropping anywhere near quick enough to meet the Bank of Englands 2% target. So raising rates will tackle inflation but harm the economic recovery.
My feeling is that a 2 year fix and a 2 year tracker will offer roughly the same cost over the 2 years, but a 5 year fix now will work out cheaper than a tracker over the 5 years. So I am leaning towards recommending five year fixed rates, although this would obviously depend upon peoples circumstances, so do not take it as a recommendation!
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