By Mark Boulton updated 5th April 2010
I doubt very much it is worth fixing at present!
I have updated my model for future interest rates.
I believe that rates will rise quite quickly in the short term – maybe to 6.5% by the middle of 2011. This will be high due to big energy and mineral infrastructure projects along with the government spending packages that are still coming through the system.
After this I believe that rates will drop dramatically due to another recession in 2011/2012. The major funding from the US stimulus package will have been spent at this stage, and the Chinese economy will be dealing with the after effects of their over-stimulus packages. Also the US will have a huge pile of ARMs (Adjustable Rate Mortgages) resetting after their 3 to 5 year honeymoon period (and these were dumb loans like the sub-prime ones) towards the middle of 2011.
I wish I had a crystal ball, as it is possible that the US could respond to their problems in 2012 by printing money to “inflate” out of trouble. However I believe that the US still has plenty of borrowing power left and will not need to go down this path (The UK and Japan may be another matter).
Well – the usual situation is that nobody guesses what will happen . . .
Rate Table
So . . . the following are my (indicative) maximum rates to fix at, with my comparative variable at 6.2%:
| Term (yrs) | Max Rate (%) | Big 4 Ave (%) |
| Variable | 6.20 (say) | 6.20 |
| 1 | 6.8 | 6.7 |
| 2 | 7.8 | 7.4 |
| 3 | 7.1 | 7.8 |
| 4 | 7.0 | 7.9 |
| 5 | 7.0 | 8.1 |
| 7 | 7.3 | 8.4 |
| 10 | 7.5 | 8.5 |
| 15 | 7.5 | 8.4 |
Notes re using this info are here
Some factors to consider regarding fixing your loan
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