Do you only go for a tracker mortgage if you think IR are going to fall?

It's not just IR, you need to consider fees.

Reasons for going with a tracker are very simple.

1 - you are never left paying way above the odds
2 - you hope that rates will decrease
3 - the tracker rate provides enough room for increases to be competitive against other products.

So - If you were to take a fixed rate and rates went down, each decrease would mean that you potentially could be paying more than you needed, however the fixed rate allows you to budget, it allows you certainty.

The BOE meet 12 times a year so rates in the worst year could go up 12 times with no control on what those increases would be. In the same breath, they could go down 12 times in a year. However, there is a risk there and if your budget can only afford a couple of rises or a 1% increase then you may want to think longer and harder about a tracker.

Now if the best fixed is already 0.5% above the tracker rate (when comparing with fees etc) then you may feel that the tracker is worth a punt because you can afford a raise in the market before you hit the point where you would have been with the fixed rate. However, it needs some luck that over the period it tracks that rates then dont exceed this fixed rate and absorb any benefits you gained.

i have now only go for tracker deals (last 3 x mortgages) after working out my previous 3 special offer mortgages all ended up costing more in the long run.

and you dont need to tie yourself in with trackers, i have 0.34 above base for term, with no exit fees,and yes i only started it 2 months ago.
saffron walden used to have 0.2 above base no fees, no tie etc, though not too sure if its still available.

my advice, go for tracker every time unless you are at your absolute max monthly possible amount you can afford, then the security of knowing what u pay may help you sleep better

I prefer a tracker because rate changes are small (if sometimes often).

Just as I don't want a flight in an aeroplane for 1p or dinner out for £1, I don't want a mortage at a rate that disadvantages the lender. I'm happy to pay a fair rate.

My offset tracker allows me to save efficiently and as it was a life of mortgage deal, I don't have the hassle of looking for new deals every two or three years.

GG

Gorgeous_George wrote: »

I prefer a tracker because rate changes are small (if sometimes often).

Whilst I agree that history over then last 7 years or so tells us that 0.25% changes happen more regular than massive drops or jumps, its important to remember that you have no protection against say a 1 or 2% rise in one go if there was such a move needed.

No issues with what you have said GG but just don't like people thinking that the BOE is only limited to these small changes. No matter how unlikely it may be that a large change happens, it still can happen.