So the BoE confirmed 4% today as expected. Average 5 year fix now sitting at 6%. My current deal ends in April and I need to decide whether to lock in a new rate now or gamble on things improving by spring.
Most brokers say you can secure a rate up to 6 months ahead. So in theory I could lock something in now and still switch if better deals appear before April. But the products available today are grim compared to what I am paying.
Anyone else in the same window. Are you locking in or holding your nerve. My gut says rates are not coming down any time soon but my gut also told me to buy Bitcoin in 2021 so take that for what it is worth.
Chap, the short answer is lock in now. Most lenders will let you secure a rate up to six months before your current deal ends, and given yesterday’s announcement and the noises coming out of the MPC about a possible further rise in December, waiting is a gamble with poor odds. The average five year fix is already at 6% according to Moneyfacts and that number was calculated before yesterday’s decision fully filters through. Some brokers are saying the swaps market had already priced 4% in, which may be true, but that does not mean retail rates will come down any time soon. If you lock in now and rates drop before completion, most products let you switch to a lower rate with the same lender. If rates go up, you have protected yourself. From recollection, the only scenario where waiting makes sense is if you genuinely believe the December meeting will hold or cut, and there is nothing in the minutes to support that view.
Grumpy, thanks. The six month lock in point is what I was leaning towards. Quick question. In this market is it worth going through a broker or going direct to lenders? Last time I went direct to Nationwide and it was straightforward enough but wondering if a broker has access to better deals right now.
Chap, Grumpy has it right.. lock in now and stop thinking about it. The 8-1 vote yesterday was more hawkish than most commentators expected, and Dhingra was the only dove left standing. Several MPC members explicitly said a further rise may be needed.. that is not the language of a committee about to reverse course.
I locked in a BTL remortgage in September at 5.74% on a five year fix and at the time I thought I was being ripped off. Looking at today’s numbers I feel like I got away with one. The buy to let market is even worse, some lenders quoting 6.5%+ for landlord products.
Broker vs direct.. use a broker. Whole of market. The direct deals from high street lenders are rarely the best in a rising rate environment because they price for walk-in traffic, not for competition. Cheers!