We currently have a staff mortgage as my husband works in a Bank (and yes that should mean that we know what we're talking about and should therefore know what to do) and the rate is set at a minimum of 4% which is obviously what we're paying at the moment but it's not allowed to go any lower, if the bank of england rate goes any higher than 4% then it can rise but have never known it go much over 5%.
However, as the bank of england rate is so low at the moment, quite a few staff have been moaning that its not a benefit anymore so they have now come up with an offer and we don't know which to go for. We can either stay on this mortgage or we can transfer to one that is always 1.25% above the bank of england rate so if they reduce it today to 0.5% we would only be paying 1.75%. However, we then run the risk on this mortgage that if they interest rates ever go back really high (we've still got 21yrs on the mortgage) then we could get stung compared to the 4% rate, we have 6 months to decide but after then we can't swop again.
I just wondered what people out there thought, and I just want to point out that he doesn't work for one of the "dodgy" banks, he works for a profitable bank in case anyone was going to make any funny comments (not that they would of course!!). We did think of transferring to the new rate which would more than halve our monthly payments but keeping the payment the same and therefore paying a big chunk off while the rates are low, but my husband's fear is that the interest rate will shoot up quite high when we eventually get out of this recession and he wishes he had a crystal ball to see how far in the future that would be - don't we all.
Any advice would therefore be appreciated just to see what other people would do really to help us make our decision.