What are interest rates going to do over the next 5 years?

[garycat]

Get your crystal balls and educated guesses out please. I'm currently trying to decide between a First Direct Tracker offset mortgage (1.89% above base) @ £486 per month or a 5 year fixed rate offset with Intelligent Finance at 5.29% which my IFA has recommended, but will be £948 per month

I'm wondering if my IFA isn't so 'I' after all.

[AlexKP]

I'd go for the former if I were you.

[emicen]

There's more to it that that mate. Monthly cost is one thing. What are the fees for arranging it and the fees if you want out of it?

[deckster]

They're going up, up, up.

[deckster]

Down, the only way is down.

[deckster]

Broadly speaking, they'll be static.

[Hub]

Who knows - Inflation could spiral after a while with interest rates low and putting more money into the system, forcing them to raise interest rates. Or they could stay the same. That fix looks too high for the present time though!

[anonymous-user]

hmm, i think they are likely to be much higher by the time you come out of that fixed deal tbh?

[garycat]

I know about fees etc, I just wanted a concensus on where interest rates will be in a few years time. AFter all, the BoE has been trying to kick start the economy with the one device it has, and it hasn't worked.

[Andy Zarse]

You need to take a view on whether interest rates going to go up or down? Apart from the fact that they're pretty much on the floor with only a maximum 1% fall mathmatically possible, and that they never remain unchanged for long, I'd ask you which way they're heading?

Do you think quantative easing or a weak currency will lead to inflation? And how will that inflation be dealt with? Interest rate hikes possibly?

If you want a short term easy ride, then go for the tracker. If you want to be sensible an know absolutely what it's going to cost for the next five years then fix. Personally I think your IFA talks sense, but then that's what he's paid to do.

[AlexKP]

Andy Zarse said:

Personally I think your IFA talks sense, but then that's what he's paid to do.

Who pays him?

[tricky69]

What a strange question !

They are the lowest level in 300 years, and they con only go down anouther 1%... so why get a tracker ? the rates will go back up over the next 5 years, i would either get a very short term tracker and be ready to jump or wait a few months for things to calm down and lower fixed rate deals to become available....

[Andy Zarse]

anonymous said:

[redacted]

It depends whether the IFA directly charges the OP a fee or if he's remunerated directly by the product provider. If he's independent he can, indeed must, recommend a product from the whole of the market, and is liable to paid a not dissimilar amount which ever product he choses.

Most people don't want to pay a fee directly by the way.

[scotal]

Your IFA cannot recommend First Direct products. They wont deal witbh brokers. Which is a pisser.

I know nothing about you, but I'd be interested to see his reasoning behind the IF deal.

[IanMorewood]

5 years time rates will be up from where we are currently, however your total cost over the 5 year period I would think will be lower on the discount, especially if you overpay the capital on the discount plan. But dont forget arrangement fees and repayment penalties before you jump in.

[ofcorsa]

How much LTV?

Best 5 year fix with 25% deposit we could get was 5.1% i think with Abbey

We were advised against Trackers too, But i still think 5.1% fixed is a little high

[IanMorewood]

anonymous said:

[redacted]

If he is truly independent you as the customer do.

[anonymous-user]

Does anyone think we'll see fixed deals at 4.5% by July? Personally i think the banks will stick about where they are now, once base rate rises they will pass on those rises(unlike the cuts)

[scotal]

IanMorewood said:

anonymous said:

[redacted]

If he is truly independent you as the customer do.

Not really true that is it?
Independent simply means he offers the chance to pay a fee, however he will still most likely be getting commission from the lender, and as such getting dopuble bubble.


ETA. the OP would need to check the KFI to see howmuch the brokerage is earning from the deal.

Edited by scotal on Tuesday 24th February 12:29

[garycat]

scotal said:

Your IFA cannot recommend First Direct products. They wont deal witbh brokers. Which is a pisser.

I know nothing about you, but I'd be interested to see his reasoning behind the IF deal.

I think an offset suits my circumstances and this was his recommendation for one - Its probably only IF that pay a fee to brokers as I know One Account don't either.

75% LTV.