Mortgage deal- can u help?

dougy_lad

I am currently looking for a deal for a £120k mortgage on a new property, I have a balance of £60k on my present mortgage which is a tracker for the life of the mortgage of BOE base + 0.95% which is great at this moment in time and can be transfered if I stay with ny present mortgage lender. They have offered me a fixed for the whole amount at 4.09% for a 3 year term or I can transfer my present tracker for the £60k and have the fixed deal at 4.09% for the other £60k, as BOE base is so good at this moment I am tempted by the latter but I am wary as to how long this may last and weather long term I would be better off with the first deal, can you help?

Cannon_Fodder

What LTV will you have on the new property?

If there is the risk that another 10-15% off house prices will knock you under 90% LTV, then you will be faced with a difficult re-mortgage in 3 years time.

Good idea to see if they will offer a 5 year option. One less re-mortgage fee to find into the bargain.

If no 5yr deal, the first deal is pretty good. Any fees involved?

Or, to get the best of both worlds, you could go for the second deal, but do the maths as though doing the first deal, keeping aside the "spare" money whilst the BoE rate stays low - then if its stays low beyond the halfway point, then great you have spare cash to make an overpayment with, or if low rates don't last quite as long as hoped, then at least you have been used to a higher level and the spare money can subsidise those future higher payments...

dougy_lad

Thanks Cannon Fodder, dont think the LTV will be a problem and only a small fee involved, I was thinking along the same lines as yourself in regards to the putting aside of monies that I would save on the second deal in case interest rates went up, but there's something nagging away at me to take the whole package at 4.09%, but I think thats me being too over cautious and thinking that if interest rates can drop so quickly they may well rise as quick, but the majority of people I have spoken to think that wont happen and have said I should take the risk and save money on my monthly payments, so I guess I'm still undecided.

Cannon_Fodder

Just seen, whilst walking down the High St, Chelsea BS advertising a 10 year fix at 4.59%...

Fee of £995 is not small, but it will save you two or three future fees.

No small print visible about what LTV they require.


I think there are quite a few people unsure about how quickly future inflation will arrive and therefore interest rates will rise to match, but the majority seem to agree it will happen, just a case of when...

10 years would protect beyond even the most extreme/optimistic predictions.

Worth a little research?

Peelerfart

Some people would be very please with ,"a tracker for the life of the mortgage of BOE base + 0.95%".

Personally I wouldn't want to give that up to easily,but like all these decisions it is a gamble.

IMO ,option 2 the fix/track would be the way I would go, but as Mr Fodder says, see if they will give a 5 year option.

dougy_lad

Yeah I agree just too good to give up at the mo, the 5 yr deal I can get is just too stretching in regards to monthly payments as Id like to have that little bit to allow me to do things to the house, so I'm going for the tracker/fix combo after finding out today there wasn't a fee for the fix after all, bank what i can from the tracker whilst the going is good and hopefully grab a decent deal for the whole amount when the fix ends.