19 Oct 2012

Crazy rates

I don't have much experience in buying houses, I've bought one in my life and I didn't even get that totally right. I probably paid a little too much for it, it's not in the best location in the world and it still needs a bit of work doing to it. 

I do feel at home here though. I've lived here for almost 2 years and I thought I got a pretty decent mortgage rate when I got my 2 year fixed deal. 

But this was back before I realised all the stupid mistakes I was making with money. So I thought I'd start looking around for new mortgage rates. 

So what should I go for? With rates so low it's tempting to try and lock in a long term deal. But this strategy seems to mean I have to pay a premium in the short term to possibly protect me IF rates rise. Is this the best way to go? Then you have to ask yourself when will the base rate rise, this article says 2018!! 

So why not a tracker? It will let me take immediate advantage of the low rates, allowing me to pay more capital and knock a few years of the mortgage. Sounds good! But then I would have to pay more if rates rose.

As the above article "guesses" rates aren't going to rise dramatically (although it also shows that they have done by 6% or more in just a matter of years), so a tracker would seem to be the way to go. It allows me to take advantage of the current low rates, gain more capital and not be affected if rates rise slightly over the next few years.

The problem is I hate having that little stress bug sitting on my shoulder constantly getting me to check what the swaps rates are doing, also with my present situation of a baby on the way and a possible job change in the short term a bit of stability could be exactly what I need (although extra cash would be handy too!). 

All it really comes down to is me being a big wussypants and preferring to protect myself against the downside risk rather than take the risky short term profits.

Damn you possible regret!

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