Fixed versus Tracker Mortgage - Help!!!

wycombeite

I am coming to the end of a 2 year fixed term with the Nationwide on a £72000 mortgage, with 18 years remaining. My house is worth around £160000. I want to stay with Nationwide and can not choose between 2 offers from them: a 2 year fixed rate of 4.98% with monthly payment of £505.52 or a 2 year tracker of 4.49% with monthly payment of £486.68. I am not pushed to the limit and have some leeway if future rates should rise. Is it worth my while going to a tracker?

_Andy_

hi

Please have a look at some of the other recent threads or use the search facility, this question is regularly discussed.

Thanks

Joe_Bloggs

The Nationwide BMR is 4% . If you drop onto this after your fix then it may be better value to do nothing. The rate per month would be around £451. You could overpay the difference between the fixed rate and the BMR (£55) and reduce your term/monthly repayment and build up a mortgage reserve.
J_B.

MrMicawber_2

Both have low fees which is good. For a difference of £18.84 I'd personally take the fix, but that's my preferred course of action not advice to you.

Consider where rates might be in 2 years time. No idea? Well, it seems to me that no-one else has the foggiest either which is another reason why I would take the bird in the hand. However there are bound to be many others who lke the tracker so it comes down to personal choice / rsik assessment.

If you have leeway I would put that money to one side to help pay your mortgage off early by making regular capital repayments - assuming you have your ready savings, pension, insurance & ISA's in hand.

feisty1

[quote=wycombeite;17220015] Is it worth my while going to a tracker?[/quote]

Ask yrself do i like stability, if the answer is yes, go for a fixed
Ask yrself will i take a risk, if the answer is yes, go for a tracker
If the answer is yes to both, you can't have yr cake & eat it

people who choose fixed in preference to trackers are more cautious, decide what you are & base yr decision on that.

If u've changed yr risk profile, is it because yr lifestyle has changed or yr just chasing rates?

wycombeite

Thanks to Joe_Bloggs and MrMicawber for your comments. Apologies to Andy ... I am new to using this forum.

TighterThanTwoCoatsOfPain

What are the fees? I'm not a "risk taker" when it comes to mortgage payments and opted for a fix, however wouldnt be looking at just 2 years... it wont be 5 minutes until you're being asked for a new application fee and quite possibly to be at an unappealing rate.

If my deal was ending now i would be a) looking for a longer term fix b) sticking on the SVR for the time being. WOuldnt be looking to lock in for 2 years.

Gorgeous_George

Ask about longer term deals (speak to a Mortgage Broker and/or use Internet Search Engines). A 5 year deal would be the minimum that I'd consider - much better a 10 year fix. Then sit back and relax.

GG

desperate_and_frightened

Hi, I am in a dilema - I have a joint mortgage with Abbey taken out 2 years ago on a fixed rate. Our mortgage is £176,000 (consolidated various loans etc) at 5.74% for 2 years. At the time L & C helped us out and it was only Abbey or one other society that would give us that much mortgage. Our house was worth £220.000 2 years ago. My question/dilema our 2 years are up in August this year, I have looked at Abbeys site and they have a fixed rate for 2/3, and 5 year which would probably save us just over £100.00 per month/£80.00 per month respectively or they have a tracker that would save approx £200.00 per month for 2 years. The other consideration is if I changed now, I believe reading the small print I would have to pay redemption charge poss up to £1700 BUT here is the big headache, my husband is the main wage earner but his firm have already made redundancies so we are concerned.
So in conclusion because of my husbands job position
1. Do I pay early redemption and try to change mortgage now and not wait until August (I am sure if he is made redundant we will have problems with getting another mortgage)
2. Do I get 2/3 or 5 year fixed
3. Do I take a change and go for tracker

I would appreciate any comments/suggestions
Thankyou so much

desperate_and_frightened

I am really sorry, I realise I should have started a new thread, sorry if I confused/upset anyone I am fairly new to formums.

wycombeite

The fees for either the fixed rate or the tracker are the same at £299 .... it costs nothing to automatically switch to the standard variable of course apart from the uncertainlty. I am thinking that I should stay on the standard variable until the announcement next week at least .... and hope that the fixed rates might come down marginally also. They have come down once for me since November.