stick or switch

donnaandcolin

I am currently on a fixed rate mortgage paying £910.00 a month. HSBC have offered a tracker at £586.00 per month. I have 18 months to go on my fixed rate and really want some advice on if it would be worth switching. To get out of my fixed rate would cost £2900.00. Please could someone give me some advice please!!!

Squish_21

Best off doing the maths and working out how much you'd save. Bearing in mind the tracker rate will go up at some point.

luckyfool

Is the £2900 just the redemption penalty, or have you included all the fees involved in the switch as well?

dunstonh

Has Martin been on telly promoting this or something? There has been a whole flood of these this morning.

donnaandcolin

all it would cost me £2900.00 inc fee to switch

luckyfool

donnaandcolin - assuming base rate averages 1.5% over the 18 months then obviously you will be better off making the switch. I think base rate is almost certain to go to 1% next month and is likely to hit 0.5% and I would be surprised if it does not average 1.5% or less over the 18 month period. Of course looking out beyond that is difficult if not impossible.

Is your fixed rate with HSBC or another lender? What is the reversionary margin on your current deal (if it reverts to a tracker), or is it an SVR you would be going to? e.g. Some people are on fixed rates that revert to lifetime trackers at as little as 0.75% above bank base rate, i.e. you could be reverting to a better deal in 18 months than the tracker you switch to now.

Depending on your answers to the above questions, and if you are secure in jobs and can afford your mortgage payment to fluctuate significantly and dont NEED the certainty of the fixed rate, then I would consider doing the switch. I think I've hedged my bets enough there.