Which one would you choose?

karie

hi leopardo

im not sure why it hasn't been mentioned yet, but with 80% LTV, which you seem to have, you could go for First Direct's lifetime tracker mortgage at 2.09% above base rate (therefore currently 3.59% (at 10.20am on Thursday!!)), with £999 fee, no ERC, and because it's a lifetime tracker you can obviously keep it for as long or as short a time period as you like.

Alternatively, first direct have an offset tracker at 1.89% above BOE (therefore currently 3.39%), with £799 fee. The offset tracker is interest only, but you can set it up to overpay and therefore pay off the capital, or basically just offset the difference between the interest only and repayment monthly figures.

I see that you said earlier that you can't increase your deposit, however if this changes, you could look at Natwest's 2 year fixed which is at 3.49% with a £999 arrangement fee (however ERC of either 2 or 3% would apply if you paid back early - need to check exact figure). This would require you to increase your deposit to £30K or negotiate further on the asking price!

Alternatively, if you could manage to increase your deposit, you could look at HSBC's lifetime tracker which is currently at 4.39% - i.e. 2.89% above base rate. This requires 75% LTV. The reason I highlight this one is because it is fee free. My boyfriend is currently looking at buying a house and when we compared the First Direct lifetime tracker (3.59% plus £999 fee) with the HSBC fee free lifetime tracker (4.39%), he would save about £50 a month being with FD, BUT it would take almost 2 years to recoup the fee. We concluded therefore that he was better off going with the HSBC tracker at a higher rate but with no fee, as he is hoping to find a decent fix over the next 2 years anyway, so would probably switch before recouping the fee.

Hope that all makes sense!!

On the subject of buying a house, I think you are completely right. As long as you are comfortable and not swimming in debt, then you should do what will make you happy, as long as it looks like a pretty good deal. Best of luck with it all

karie

leopardo_2

Hi Guys

Thanks for the further responses and support for our decision to buy!

Karie - thanks for illustrating the 75% deals - I'd love one of them but there's no way we can get the extra deposit unfirtunately. It took a fair bit of negotiating to get 15k off the asking price. I'm a bit wary of trackers right now. Although they are a great deal at the moment I worry that when rates inevitably rise again (the banks have to claw money back from somewhere) that we will be still on a tracker thatsa fair bit above the base rate and we won't have the equity in the house to get a good fixed rate. I really appreciate your input however!!

Nessie - I'll investigate the Nationwide deal further I think as after Dimbo's comments earlier I'm swaying toward a longer term fix and Nationwide's rate may reduce today when the base rate comes down (as I'm pretty sure most believe it will)

Xinpei - Who is the deal you mention with? I've heard Derbyshire BS offer a fix at that rate. I have met with 3 mortgage advisors to see who can offer the best deal! 2 independents and a HBOS advisor based in the Halifax estate agents I'm buying through. Best halifax have offered is a 3 year fix at 5.84% on repayment.

Cheers all

Leopardo