Mortgage related questions for first time buyer

Ruhana

hey
Me and my partner are currently in the process of purchasing a house but have yet to agree a mortgage. Would like a bit of help on what would be the best type of morgage to go for; fixed or tracker etc? We have a 20% deposit on a house worth 245,000. When i search for mortgages on moneysupermarket.com site the results are a little confussing, it says in the term section until 2011, so its fixed for 2 years but in the section intial interest rate it has 2 figures for example 5.49% then 3% with an APR of 3.7%. can someone please explain what interest rates i would be paying and for how long? Also you cant seem to change the term in which you want the morgage for? would be grateful foe any help.




Thanks!

davidla

Hi - well, I'm not an expert but I'll give this a go:
1. What's better: tracker or fixed?
How long is a piece of string? No one knows. Fixed = security of knowing how much you will pay over a fixed period. Tracker rate can go up (bad!) or down (good!). Can you afford to gamble with a rate going up?
2. 5.49% is the fixed rate for the first 2 years. After that you will go onto the SVR which is currently 3%. However remember that the SVR can (probably will) change and the SVR in 2011 will probably be different from the 3% it is now. Also in 2 years, you don't have to onto the SVR, you can choose another fixed/tracker rate.
Good luck!