UK interest rates - up or down :confused:

Ok - so today's challenge for me is to pick a UK mortgage deal from afar. Problem is have no feel for the UK economy at present.

Info I have to hand suggests the following:

1. Base rates have been lowered but not all lenders are following this as a result of the Credit Crunch.
2. Several banks have offered me 5 to 10 year fixed rate deals. Since banks are out to make money - this implies to me that they expect rates to fall in the medium to long term.
3. Inflation is up (3%) which would tend to drive interest rates up, but economic growth seems to be down which should push rates down again.

I'm tempted by an offset deal with 5 years discount at about 0,7% below the standard variable offset rate from my bank. But I'm being distracted by a life tracker at 0,34% above the bank's base rate.

Any thoughts from my learned Alfa friends on which direction rates are likely to head?

Stay in Norway would be my advice

Originally Posted by Monty

Stay in Norway would be my advice

Bit late for that Monty!

Originally Posted by Viking Dad

I'm tempted by an offset deal with 5 years discount at about 0,7% below the standard variable offset rate from my bank. But I'm being distracted by a life tracker at 0,34% above the bank's base rate.

Well who wouldn't be *



























* I have no idea what your talking about

i'd be tempted to go for a lifetime tracker so you can get yourself onto a decent deal and sit on it until the credit crunch blows over, rather than say a 2 year deal where you'd have to re-do it in a couple of years and be at the mercy of whatever deals are on the table at that time. trackers also have the advantage that if BoE base rates are reduced then your lender is obliged to follow suit within 30 days (but remember if rates go up then so will your mortgage rate bla bla bla). fixed rates are quite good value at the moment but the fact that they are low points to the likelihood that interest rates are expected to stay fairly low for the short-med term. this month's inflation figures have quashed the idea that the base rate will come down immediately, but many analysts are predicting a reduction in june or july

woolwich, nationwide and C&G (amongst others) have good lifetime trackers on the go at the moment

if you need any help, pm me


PS re: the lifetime tracker at BBR + 0.34% - watch out for the arrangement fee on that, it's likely to be pretty steep!

That deal sounds good - the rate of inflation is high so i cant see the BoE lowering the interest rate and there is no promise that the banks will lower theres.

I'd be tempted to buy another 159 SW, and sleep in that

It's a bit dull but as long as the arrangement fee isn't to high and any penalty payments for bailing out early decrease with age, I'd go for the fixed rate. your monthly out goings are fixed and you know where you are.
As the difference between the fixed and tracker is 1% your only going to win on the tracker if the rate goes down by more than 1%(and stays there). Which with high inflation set to continue seems unlikely.


Ps. Acapulco Al might know more about this than me.

Originally Posted by Lookin' 4 Ferdi

Well who wouldn't be *


* I have no idea what your talking about

Poor old confused Shark

Doesn't know who to bite!

Originally Posted by ACAPULCO AL

i'd be tempted to go for a lifetime tracker so you can get yourself onto a decent deal and sit on it until the credit crunch blows over, rather than say a 2 year deal where you'd have to re-do it in a couple of years and be at the mercy of whatever deals are on the table at that time. trackers also have the advantage that if BoE base rates are reduced then your lender is obliged to follow suit within 30 days (but remember if rates go up then so will your mortgage rate bla bla bla). fixed rates are quite good value at the moment but the fact that they are low points to the likelihood that interest rates are expected to stay fairly low for the short-med term. this month's inflation figures have quashed the idea that the base rate will come down immediately, but many analysts are predicting a reduction in june or july

woolwich, nationwide and C&G (amongst others) have good lifetime trackers on the go at the moment

if you need any help, pm me


PS re: the lifetime tracker at BBR + 0.34% - watch out for the arrangement fee on that, it's likely to be pretty steep!

You sound well informed Al - work in this field?

Anygone got any thoughts on offset vs. std mortgages?

I pay sh*tloads of tax, so will get top rate benefit on interest and should will have an average of about 3-5% of the mortgage value that I can offset against through the year.

Cost of living's on the up and up, and more of the same is predicted as the spiral ever ascends, so I reckon interest rates may go up to a seventies high of about fifteen percent?

As I'm no expert, and love a stir up, I guess we all have to wait and see, and hope we do not require that barrow load of money for a loaf of bread!:Geez! Times are getting tough out there.

Originally Posted by zulu ferret

Cost of living's on the up and up, and more of the same is predicted as the spiral ever ascends, so I reckon interest rates may go up to a seventies high of about fifteen percent?

As I'm no expert, and love a stir up, I guess we all have to wait and see, and hope we do not require that barrow load of money for a loaf of bread!:Geez! Times are getting tough out there.

Ever the optimist eh ZF?

Originally Posted by zulu ferret

Cost of living's on the up and up, and more of the same is predicted as the spiral ever ascends, so I reckon interest rates may go up to a seventies high of about fifteen percent?

As I'm no expert, and love a stir up, I guess we all have to wait and see, and hope we do not require that barrow load of money for a loaf of bread!:Geez! Times are getting tough out there.

Like ours on 16.5 % with inflation hitting 12% . They predict that we will hit 20% by year end

Originally Posted by Dirk

Like ours on 16.5 % with inflation hitting 12% . They predict that we will hit 20% by year end

That's because your inflation is way out of control! 12% inflation is bloody scary. And your interest rates are doing nothing to control it unfortunately. Nasty situation - I lost a house in the early 90's due to 15% rates in the UK. Not funny at all.

Don't know if this will help but my dads got a mortgage company who specialises in expatriates buying in the UK or people coming back to the UK

He's got a newsletter on here about the market and may be able to help.

Expatriate Mortgages Services

Originally Posted by JonSpiderMan

Don't know if this will help but my dads got a mortgage company who specialises in expatriates buying in the UK or people coming back to the UK

He's got a newsletter on here about the market and may be able to help.

Expatriate Mortgages Services

Cool - thanks Jon. I actually think I spoke to IMP a few years back when I was looking to buy a second property somewhere else.

Mervyn King said that rates may not drop for a couple of years earlier this week.

Watching this thread with interest (no pun intended )

We are currently trying to negotiate a price on a flat and mortgages for it have confused me no end!

Originally Posted by AlfaJack

Watching this thread with interest (no pun intended )

We are currently trying to negotiate a price on a flat and mortgages for it have confused me no end!

Negotiate? In the current market?!?! Don't negotiate just go and kick them in the balls!

The house I just bought was orginally on at 340K. I got for 285.

Originally Posted by Viking Dad

Negotiate? In the current market?!?! Don't negotiate just go and kick them in the balls!

The house I just bought was orginally on at 340K. I got for 285.

Thats what I was hoping would happen. Its up for 200, first offer was for 175, second was for 180. We are yet to make another.
Its a real shame that we want this place so much. Its the only one we have seen so far that ticks all the boxes!