mortage rates question

qwertyphobia

my opening fixed rate deal of 2.34% is about to end soon the bank are offering me 2 year fixed at 4.14% or a viarible at 3.53%.

My question is. Banks must spend a lot of time and money figuring out the likly market changes over the short term and have set the fixed rates at a level that they are unlikly to get caught out. So is it always the best option to go with the variable rate?

I know suden changes can catch them out as well and at times it could be the case that variable rates end up above fixed rates. But as a rule of thumb is it the case that money wise you get better value from variable then fixed rate?

I have some leeway in my payments anyway so i could afford either one probably just want peoples idea on which is best value

Thanks

spongebob

When my Discount Variable ended with BoI I simply rang them up and said that (pick a name = AIB) another bank 'offered' me a 3% tracker and that they would pay the fees to change over blah blah

They rang back 2 hours later and moved me onto a Tracker Variable (instead of Standard Variable) and gave me 1% over base . Thts 3% at present.

I signed and dated a form they posted me, mailed it back into them and have been on 3% since. It was so painless, the phone call took less than 5 minutes but I knew which bank was offering packages at the time to take your mortgage over .

M

RainyDay

You are unlikely to 'beat the system' with a fixed rate for the reasons you outline above - The banks know more about where the rates are likely to go and they have priced the fixed rates accordingly. Fix if you need the security of fixed repayments, otherwise take the best tracker rate you can find.