Remortgage to Fix or Track

WorkingHardDFW

I'd appreciate a little advice if I could.

We are on a FT mortgage which ends at the end of Jan 09. Our current deal is with the Nationwide at 4.59%.

We sourced and been offered a new fixed rate deal with the Abbey for 2 years at 5.74% however we are aware that rates could fall between now and the end of Jan.

We were discussing the situation at the weekend and are now considering whether a tracker would be a better option for us particularly with views being that rates could fall during the next 12 months.

So my question is should we fix or track?

Any thoughts or comments would be much appreciated. Thanks

lisyloo

Rates are expected to fall quite sharply in 2008 and thru to 2009.
They are then expected to go back up in 2010.

Your question is impossible to answer.
My feeling is that long term, it won't make a massive difference because there will be both lo and high rates.

The main difference is that with a fix you have safety.
So the real question is - how important is that safety to you?

If the safety is moderately or highly important then you should fix.
If you have plenty of spare income and it si;t important then you have the choice.

All IMO of course.

Toughluck

I am going to stick my neck out. If BBBR comes down next month I really do think that the majority of lenders will pull their trackers completely. N Rock are withdrawing trackers tonight and putting them up C&G, A&L and Nationwdie do not want to offer trackers at the moment. I am seeing a slow increase in the lack of lenders offering trackers. First Direct doing a good one at the moment, however you must bank with HSBC to get it.

Reds-on-Sea

I have no idea if it's still available, I've not been keeping up with the mortgages like I used to, but HSBCs life time tracker was fee free & no lock in, I got mine at 0.68% above base rate a few months ago at 90% LTV. I initally got this with a view to getting a decent fixed rate when one came along, but actually, it's working out pretty well for us atm, and appears to be coming down monthly! If rates are coming down and you're worried about paying over the odds & missing out on lower rates in the next year or so, then something like this would be ideal wouldn't it? You can jump ship at no cost and get a lower fixed rate. If, like Toughluck says, everyone's pulling their trackers, might be worth getting a wriggle on!

WorkingHardDFW

Thanks for all the advice and comments

I appreciate that its up to us to decide and its an unusal and difficult market at present and may be for a while.

I've got a call out for my mortgage broker to get his view.

I think where we're at is that come Nov next year we'll have cleared our debt :j and we'll be looking at becoming a MFW . I don't particularly want to get locked in with a fix for a couple of years when rates are looking like they'll be coming down for a while.

I may give our existing lender (nationwide) a ring and see what'll they can offer.

savemoney

My mortgage end in Jan 09 2 year fixed rate @ 5.9% with First National (GE Money) and I am wondering this too. I believe rates will come down next month maybe as much as 1%.

I got a FA coming to me house on 11th Nov to see whats best way forward

WorkingHardDFW

Its a tricky time since we all want the best deal we can get in the present circs. As I saw I've got a call out for our broker to get his thoughts.

savemoney

I had a letter followed by a phone call from the FA (country wide mortgage) we used in 06, they said they are booked up because of a lot of fixed rates ending soon

I seem to recall it mention on tv that trackers seem to be best at mo, but I suppose it depends on your circumstances and budget

Toughluck

Countrywide are not busy, they are losing money I know as i used to work (many moons ago) for them and keep in contact with the branches I used to work in. Taylors, Bairstow Eves etc are all scratching around for business. Maybe not in every part of the country but to say they are booked up is bulls*it if you ask me. taylors are losing money and bairstow Eves closed a branch down in my town 3 weeks ago. Busy my !!!.

They said fixed rates are ending soon. Sorry again, what a pile of crap. N Rock just announced on my email they are reducing fixed rates to 5.35% tomorrow with £2K fee. i do not miss the prsseure sales of Countrywide FS.

As I mentioned, trackers are becoming like gold dust. Get in quick.

Jett

A point to note.....Some people have mentioned they were informed that their applications could take up to 10 weeks to be processed. Not saying to jump into the next available deal out there but this coupled with what Toughluck is saying has certainly made me think a little more about when to start applying as i too have a deal running out in feb 09.

I've pretty much given myself the deadline of December 10th to decide.

Anybody know how Christmas and New Years affects the financial business? what close down they have?

Thanks