Variable v Fixed (Sept. 2010)

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PaulClaw

Guest
I have been approved for a mortgage recently and I am unsure of which option to go for. I have a variable interest rate offer of 3.09% and fixed interest rate offers of 3.89% (3 years) and 4.39% (5 years). I am looking for advice more than anything as I am a novice in this area.
 
4.39% for 5 years looks very good imo. I've seen other users quoting much higher for fixed rates lately,up to 5.75%
 
Thanks for reply Norfbank.

By limitations, the variable rate staying low obviously. What other ones are you thinking of?
 
You cannot usually vary the terms of your mortgage without penalty e.g overpay, pay back lump sums, switch, redeem, reduce or increase term without penalty.
 
Considering that the European Central Bank indicated within the past few days that interest rates will remain at current levels until 2012 at the earliest, then short term fixed rates i.e. up to 5 years, are not the way to go.

I suspect that the banks are pushing fixed rates big time right now so as to earn additional cash.
 

ECB rates may remain constant so you're fine if you are on a tracker or fixed rates. Variable rates will increase regardless of what the ECB does so fixed rates still makes sense once you are aware and are comfortable with their limitations.

[broken link removed]
 

Hi csirl, could you tell me where you saw this so I can have a look? Thanks a mill
 
fixed and variable

interesting stuff, I love askaboutmoney!! so Im seeking a short term loan at the moment and from what you have been saying i am better off taking out a fixed motor loan than a variable? I plan to pay if off over 3 years...there is actually very little between the two repayments at the moment but from what you are saying here the variable will rise over 2011-2013??
 
I wonder if anyone can advice me as I am lost as to what to do.

I am currently on a variable mortgage (paying 3.5%). I do not know if I should go onto a fixed rate for 3 years at 4.9%. I will struggle to pay this but would struggle even more if the variable rates shoot up.

I really don't know what to do ...
 
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