Interest Rates and Fixed and Base Rate Tracker Mortgages

In the UK interest rates fell to 1% today - ie the lowest it's ever been. I've got two mortgages at the moment - a base rate tracker for the house I bought in Jan 2009 which we're renovating, and a fixed rate for the apartment we're living in at the moment.

In Sep 2008 my two year fixed rate expired and having lived through 17% interest rates in the early 1990's I decided to enter a new fixed rate of 6%. This of course was the wrong decision and since then rates have steadily fallen. In fact they fell to such a level that it was worth bailing from the 6% into a lower rate and paying the penalty which came to about £8k.

Over the next two years I think I'll only lose about £500, but the main benefit is that my monthly payments have gone down by about 20%, which is great news when you have two mortgages.

In Jan 2009 I more wisely entered into a base-rate tracker for my new smaller mortgage which is for an uninhabitable house which I (or rather the builders) are renovating.

More property investment stories later ...