Tuesday 9 February 2010

The UK must not be STUPID

"The PIGS (Portugal, Italy, Greece and Spain) are old hat. The new acronym on trading floors for possible dominoes if Greece should fall is STUPID (Spain, Turkey, UK, Portugal, Italy, Dubai)."


I ponder this momentarily and decide that if even the Greek government is now paying over 6% interest on its debt issues, as a result of diminished confidence in their economy, then what kind of rate must Greek citizens be having to agree to if they try to take out a mortgage deal right now? It just doesn't bear thinking about.

I look inwardly to my own situation, I see myself in the UK, a country that is approaching the crosshairs of the speculators' rifles, and I see myself having no choice but to keep up paying the mortgage on my home for the foreseeable future.

I finally was able to call the nice people at Santander (Abbey) yesterday to see what kind of deals they have to offer me currently, as my fixed rate finishes in a few months. Among the items on the menu they had 2 years fixed for 3.89%, and 5 years fixed for 4.99% (there are also 2 and 3 year Trackers at 2.19% over the BoE base rate and 2.09% over BoE base, respectively). Both of the fixed rate deals have a £125 booking fee applicable, which seems very reasonable (the Trackers have £624 booking fees). I was very surprised that there is an offer of 5 years under 5%.

This morning, after mulling over the options, and considering the potential outlook for rates going forward, I think I am going to opt for the security of 5 years fixed. It would be nice to have a couple hundred quid a month less to pay by going on the cheapest-today Tracker, but frankly the last thing I could cope with is rates going up massively. It's not worth the risk and the sleepless nights that would ensue. What price can you put on 5 years of sleep?

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