Variable rate vs fixed rate mortgage...

What are peoples thoughts on this classic mortgage question?

Personally I think it comes down to two things: the current market conditions and also your appetite for risk!

With a fixed rate you have the certainty but then if you think that the rates are going to go down then you really don't want that certainty as there is nothing more annoying than seeing the rates plummet and knowing that you are paying over the odds.

However if you have an income level that is close to the mortgage amount then the peace of mind can be worth it as at least you know you can make the payments no matter what happens to the rates the risk of course being on the variable rate that it goes up and then you may struggle to meet the payments.

Re : Variable rate vs fixed rate mortgage

In the current market conditions then you may as well get a variable rate mortgage as the rate is so low.

On a fixed rate mortgage you are basically biding your time, I have never liked the idea of those at all... the idea that even after paying interest every month for 25 years or whatever and then at the end of it still having the entire sum to pay off.

With a variable rate mortgage you get the sense of progress each year when you get the statement from the bank or building society and you see the total amount repayable actually starting to fall!

Re : Variable rate vs fixed rate mortgage

I find all the different types of mortgage to be very confusing indeed.

I think men generally tend to be better at finance so I leave all that sort of thing to my husband, though I am trying to get better financially hence signing up for these forums and trying to learn through the articles on this site all the different types of mortgage.

It is quite interesting but I don't think I will ever get fully on top of it.