Fix for three years or 2year tracker?

SallyK_2

I am about to come out of a 2yr fixed rate and need to remortgage. My broker is recommending a 2yr tracker with Abbey - cheaper repayments, cheaper fees etc. I have always been cautious and stuck to fixed rate deals. I am a little uncertain as to what to do as i do not want to be tied in to a three year fixed deal if rates fall but also I am nervous about going for the tracker if interest rates rise too much and I could put myself in trouble with higher monthly repayments. Has anyone got any feelings about how interest rates are likely to go over the next year or so?

Toughluck

Uppers downer all arounders is my answer. If I knew that I'd be earning more than I do now!!

It honestly depends on your attitude to risk. By the sounds of it when you are typing this your mind is cautious to rates as you worry if they will shoot through the roof, therefore you and I know if you fix your rate the payment will be the same for a given period and you'll be able to budget around the mortgage payment every month accordingly.

elsien

SallyK, I'm having similar thoughts.
When I phoned Nationwide re a remortgage a couple of weeks ago, (I'm already with them, might be different for new customers.) the fixed rates and trackers either had a big fee, or were for 5 years (which is too long for me.)
I decided to wait, and now all their fixed rates are fee free, and the same rate for 2,3 and 5 years, and the trackers have come down as well. If they haven't a clue what the market is going to be doing, what chance do we stand!
I'm also debating whether to go for a 2 year fix or a 3 year tracker ( and am also usually quite cautious.) All I can suggest is you ask the mortgage advisor to give you illustrations of what the tracker will mean in terms of monthly payments if the interest rate does go up to 7, 8, 9% and see how manageable that still feels if it all does go horribly pear shaped.At the moment I'm tending towards the 2year fix, but have changed my mind 3 times this evening already.

Crystal ball anyone?

dimbo61

tracker or fixed !
The main thing to remember is how quickly you can pay off the mortgage while paying the least amount of interest.
Consider what you can afford and if you are not moving in the next 5/10 years and then look at long term deals with the ability to overpay and clear or reduce to only a few pounds the mortgage balance ( if penalties !)
try to pay only one more set of fees before your mortgage is finished !!
If you cant afford to take the risk if mortgage rates do rise then take a fix and overpay as much as you can afford each month. check the terms & conditions of the mortgage offer . Think long term