Thursday, 3 December 2015

Mortgage Deals! #financial

Well it’s quite unbelievable we are only 4 months away from owning our current house for two years! (better get some cake in, any excuse hey!)

The anniversary noted by my friendly mortgage broker calling me to ensure I opt for a new deal, rather than being rolled over onto a more expensive interest rate (costing a staggeringly £200 more per month and as we know money doesn't grow on trees!).

With that being said its quite obvious why you should always remember your mortgage deal end date, the reason why I went for a two year fixed deal was because I was unclear what the interest rates were likely to be doing, there was a general mixed feeling surrounding a rate increase.

So now I am to ponder again, if I stick to another two year deal I can save nearly £90 per month, however if I went for a five year deal it would see me paying just £5 less, of course less is always definitely more, but at what point of interest rate increase would the lower term become unstuck?

If interest rates rose more than 0.75% within the initial two years that would be the tipping point (I think – but I am by no means financial in these terms!) It’s all down to acceptable risk, in my case I believe if it was decided to raise the interest rates then, it would be done very slowly over time, as the UK government wouldn’t want to risk financial crisis again!

So for me I will endeavour to take the two year risk again in the hope that interest rates remain fairly static and enabling me to again gamble with the rates when I would estimate we could be facing some higher increases and it would be time for me to fix in for the longer haul!

Currently the interest rate deals to fix in are bounding back up, I have to wait until I am within 90 days of the deal end before I can effectively swap – my hopes are they don’t bounce up to much until I fix in the New Year!

Happy deal hunting!

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