Stuck in a fixed rate, any way to get out of it?

missk_ensington

Can anyone help me, I'm stuck in a Halifax fixed rate until July 2011 at 6%. Apparently the ERC would be £2,500 to get out of this.

Obviously the base rate is now considerably lower than when I took out this deal (which was a good deal back in July last year) however now I would be considerably better off on a tracker mortgage - actually probably about £350 a month better off!

I think with a £2,500 ERC the benefits would be so slim that they'd be outweighed by the risk of rates going up again, but does anyone know if there is any chance I would be able to change deals, whilst remaining with Halifax, for a lower fee?

Any advice much appreciated.

Thanks

_Andy_

No, there isn't any chance.

TEDDYRUKSPIN

Yep. Pay to get out! You must pay the ERC as this is under your contract agreement.

It sometimes is worth paying off the ERC only if it is deemed a saving.

beecher

You'd have to pay the £2,500 plus a hefty fee to get a tracker with the Halifax.

https://www.halifax.co.uk/mortgages/existingcustomer3yrtracker.asp

By 2011 maybe your 6% will look cheap again - over the long term your fix might still have been the best choice.

Robert_Sterling_3

Well then ... Do you consider it a saving in this case.

Evidently Andy does not.

The OP sees that it might not be.

Your post looks a bit ambiguous.

I tend to agree with Andy which does not mean that he is right.

Advice to OP ... Use your own judgement.

Peelerfart

For my two pennies worth - I'd agree with Andy.

However it is your call - ask yourself "do you feel lucky ?"

missk_ensington

Thanks everyone, I think it all boils down to whether we think interest rates will stay low for more than 2 years for the outlay to be justified. Will take almost a year to breask even the £2,500 plus tracker rate in monthly savings, if interest rates were to then start increasing, to a point where the tracker exceeded 6% then I wont have gained anything, and will begin to lose money.

But if interest rates stayed exceptionally low for the next 2-3 years then I'd be a lot better off paying to get out.

So do we think interest rates will stay this low for long?

mystic_trev

Lots of people are now thinking it's great time to get a Tracker - meaning it probably isn't! If I was looking for a mortgage now I'd be looking for the best Fixed rate, and fix it for either 5 or 10 years. In a couple of years time Interest rates will probably be a great deal higher than they are at the moment. At least with a long term fix, you can budget for the future.

All (of course) IMVHO.

System

missk_ensington wrote: »

however now I would be considerably better off on a tracker mortgage - actually probably about £350 a month better off!

A tracker mortgage will kill you when (although no one knows when) rates inevitably shoot up again.

_Andy_

Sorry - mis-read the original post.
I'd skim-read it as 'can I change without ERCs'.

beecher

missk_ensington wrote: »

So do we think interest rates will stay this low for long?

I don't, which is why I'm keen to get off my SVR and onto a 5 year fix in the next few months.