Fixed or Variable?

I've been given mortgage approval by First Active and was going to go with the Offset Flexible 5.3% APR (1.15 above ECB). First time buyer.

However I've seen various reports that First Active are going to increase their rates this week? If so how much is this likely to be can anyone hazard a guess?

Am pretty happy with the repayments as things stand and would be a bit stretched should they increase. Should I go for Fixed Rate instead for the first year or two? Or would this leave me tied to rates that are likely to decrease again soon. A bit clueless when it comes this. Thanks

Go for fixed, Rates are most likely going up despite the media saying for the past year they are heading down, and the fact you say you'd be a bit stretched you'd be better off with a definite payment. Fix for 2 years would be my recommendation, I'm not a financial advisor but I am on 2 years fixed (4.99%), thank god. In 2 years time maybe the rates will have halted again. You can't predict the future though - Its just what i would do.

The First Active fixed rates are amongst the lowest at the moment and are the same or possibly lower than the Offset variable.
With ECB rates forecast to rise in July by some - you could remove any worry about higher repayments by going fixed for 2 or 3 years. Its a gamble - but at least you will not have to worry about increased mortgage payments for a while - and hopefully in 2 or 3 years your income will have risen.

Thanks guys. Yeah thought as much myself - the 2 year fixed (5.3% APR) repayments are slightly lower than the Offset.

I like the idea of the Offset but it is probably more suited to a couple of years down the line when I've gotten used to repaying, can afford to gamble a little more and am able to save a little to offset the interest

debs1977 said:

Thanks guys. Yeah thought as much myself - the 2 year fixed (5.3% APR) repayments are slightly lower than the Offset.

I like the idea of the Offset but it is probably more suited to a couple of years down the line when I've gotten used to repaying, can afford to gamble a little more and am able to save a little to offset the interest

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First active have removed there 1 year fixed rate as of Friday, even people who had accepted the offer and at draw down stage were rejected and new offers issued. Offers are changing on a weekly basis, I wouldn't trust any rate given at the moment it could go up at any stage.