Fixed vs Discount Mortgages Article Discussion

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Former_MSE_Dan
Former_MSE_Dan Posts: 1,593 Forumite
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edited 15 June 2010 at 12:42PM in Mortgages & endowments

This is the discussion area for the
Fixed vs Discount Mortgages Q&A Guide

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NB. If you wish to specifically discuss the Quick Should I Ditch my Fix? Calculator, please use its own discussion thread
Former MSE team member

Comments

  • doogstoos
    doogstoos Posts: 11 Forumite
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    This is a question that's very close to my wallet at the moment.

    I am about to complete on a house. Ive taken out a 10 year fix rate with halifax at 5.3%.

    I could of course get a tracker at approx 3.5 that would shave approx £140 off my monthly payments, but my payments on the fixed rate are fine for me + I think that the UK is in store for some inflation in approx 2 years time. In an inflationary environment interest rates will have to rise, especially with the slow collapse of sterling that we are currently witnessing.

    My thinking therefore is that it's best to lock in now, and take the extra hit of £140 a month with the expectation that long term the 10 year fix will work out better and once I come off my tracker (if I were to take it) in 2 years long term fixes will be significantly higher because of the scenario outlined above.

    Plus of course I get peace of mind and dont have to worry about interest rates etc for the fix's duration i.e. 10 years.
  • drifter410
    drifter410 Posts: 4 Newbie
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    I have a part tracker, part capital & interest mortgage with Nationwide. Total remaining is £65262, with £42000 payable by the tracker. If I use the Calculator do I enter the total amount, or the Capital/interest part to find if I should ditch the present mortgage.
  • Sarajamer
    Sarajamer Posts: 1 Newbie
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    I have a mortgage with Nationwide, so I used the calculator and happily went in to transfer to another deal recognising that I would have to pay the redemption. To be told that they have changed the rules and we are no longer allowed to switch. I am awaiting confirmation in a letter, but in the meantime am now looking to moving my bank account and my mortgage elsewhere. Anyone else experienced this?
  • shaunv007
    shaunv007 Posts: 8 Forumite
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    we got a £50000 fixed rate mortgage with the halifax 5yrs ago just before recession and interests started to drop grrr but this ends this december (yippee}
    i know its still a few months away but we would really like some advise with what deals would be best to take, we have lots of equity in house thats valued at £180000 but we havent got any savings and purse strings are pretty tight at moment.
    great site big thumbs up
  • Caboodle103
    Caboodle103 Posts: 1 Newbie
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    This is a great article and this site and has really helped my decision making. I am coming to the end of a two year fixed deal and have been "looking back in anger" at my decision to fix when I would have paid less if I hadn't but the article is spot on, I made my decision based on the risk I could afford to take and unlike pretty much all my other outgoings at least my mortgage repayments have been stable.

    Now my deal is up and I am probably "closer to the edge" and less able to manage fluctuations in outgoings so gambling on rates is not an option. Despite egging on from "discount and variable rate" devotees I'm going to do what best protects my family and my home and go for another fix. My strategy is to go for a longer period and (if I can afford the repayments) a greater repayment to interest only ratio to bring the capital amount down.

    Thanks MoneySavingExpert!
  • macca789456
    macca789456 Posts: 49 Forumite
    First Anniversary First Post Combo Breaker
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    sarajamer i am also with nationwide 10 year fix 5 years in and have also been told the same have taken this to complaints procedure and have had there final response which states that i cannot pay the erc and switch to another mortgage product as they do not have any.What is really annoying is they are advertising deals all over the place but i have been told i can only pay the erc and go elsewhere . Before anyone asks my L T V is10%. My letter from them says there products dont exist for people on a fix wanting out but get this NEW CUSTOMERS can have these products. My terms and conditions state i can transfer to another product if i pay the ERC but there get out is there is no other products dfor us . My complaint is now going to the ombudsman who hopefully will sort out this shocing behavior of Nationwide to loyal customers .
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