Return of the tracker.......

HAMISH_MCTAVISH

From The Sunday Times

July 5, 2009



div#related-article-links p a, div#related-article-links p a:visited {color:#06c;} Borrowers are being advised to consider tracker mortgages again, as the cost of fixed rate deals rise.

Last week, First Direct launched the market’s first “capped tracker” — with a rate of 2.48% above Bank, giving a rate of 2.98% at present, and a £1,499 fee. Interest repayments, which start at £946 a month on a £200,000 loan, are guaranteed not to rise above 4.99%, or £1,168 a month, for three years.

The deal is not available through brokers, who said most economists expect Bank rate to remain below 5% until 2012 — defeating the purpose of the deal.

However, that is not to say trackers are not becoming a better option. Ray Boulger, at broker John Charcol, said some borrowers would do well to take out HSBC’s market-leading lifetime tracker, at 2.24% above Bank rate — 2.74% at present. Those with a 40% deposit are eligible and the fee is £799.


The loan has no early repayment penalties, so you can switch to a fix at will. Monthly repayments on a £200,000 repayment loan start at £921.
Borrowers shied away from trackers as the cost of fixed rate deals became cheaper and fears grew that Bank rate would soar as the economy recovered. However, these no longer look as attractive.

:rotfl:

"Market leading 2.25% above base rate......."

:rotfl:

Millions of people on pre crash mortgages have SVR's that are CAPPED at 2% above BOEBR!!!!!!! Better than todays "market leading tracker".

Every one percent more in interest costs roughly 35K (???) extra for a mortgage term on a 200K mortgage.

For every one percent more you pay in rates compared to pre crash purchasers, you need roughly a 15% discount in prices to compensate.

I've said it before, and I'll say it again, there will be a lot of pre crash purchasers on good mortgage deals who will pay less than post crash purchasers over the term of the loan. Not all obviously, but more than many people realise.

And those existing mortgage deals are good enough to prevent many people from selling I would think. The benefits that I admit a crash can give in terms of upsizing would surely be wiped out by having to get a new, worse, mortgage.

mewbie_2

Hamish - have you ever thought of Twittering?

carolt

He does Wittering very well.

Thrugelmir

Are you sure? The average SVR is well above 2% above. So you want to check this out.

HAMISH_MCTAVISH

Thrugelmir wrote: »

Are you sure? The average SVR is well above 2% above. So you want to check this out.

All of the Lloyds and Nationwide (plus some others, I think) pre-crash mortgages revert to a capped SVR of BOEBR + 2%. SVR for new borrowers are higher nowadays.

mewbie_2

HAMISH_MCTAVISH wrote: »

All of the Lloyds and Nationwide (plus some others, I think) pre-crash mortgages revert to a capped SVR of BOEBR + 2%. SVR for new borrowers are higher nowadays.

Is that good or bad Hamish? I can't work out what it means.

Graham_Devon

HAMISH_MCTAVISH wrote: »

All of the Lloyds and Nationwide (plus some others, I think) pre-crash mortgages revert to a capped SVR of BOEBR + 2%. SVR for new borrowers are higher nowadays.

I think this is where you will find you are wrong.

There was a clause in the capping at 2% above base rate, if the base rate went below (normally) 3%.

Which means, if the base rate was 2.5%, or, indeed, in a bizzare situation, say, I dunno, 0.5%, the capping part would cease to exist.

I was on a 2% above BOE rate on my tracker. However, I'm now paying 3.75%, 3.25% above the base rate.

I'm also now a Lloyds group customer thanks to banks buying each other for 10p and Fred Twatwins last rolo.

I doubt there are that many, on trackers at the moment who are paying 2.5%, though I'm sure most of the bulls will be....but they will also be on a fix for 52 years, and mortgage free, depending on what suits best at the time

shakerbaby

mewbie wrote: »

Hamish - have you ever thought of Twittering?

You seriously believe he could stick to 140 characters? :rotfl:

HAMISH_MCTAVISH

Graham_Devon wrote: »

There was a clause in the capping at 2% above base rate, if the base rate went below (normally) 3%.

Which means, if the base rate was 2.5%, or, indeed, in a bizzare situation, say, I dunno, 0.5%, the capping part would cease to exist.

I was on a 2% above BOE rate on my tracker. However, I'm now paying 3.75%, 3.25% above the base rate.

For sure the original Lloyds TSB (and C&G) mortgages were on an uncollared BOEBR + 2% cap. I have one, and I checked.

I believe the N'wide's 2% cap was also uncollared, but I couldn't confirm this as I don't have one.

The merged banks loans should still be on the original contract terms, so they won't be eligible for the cap if they didn't have it.

Graham_Devon

HAMISH_MCTAVISH wrote: »

For sure the original Lloyds TSB (and C&G) mortgages were on an uncollared BOEBR + 2% cap. I have one, and I checked.

I believe the N'wide's 2% cap was also uncollared, but I couldn't confirm this as I don't have one.

The merged banks loans should still be on the original contract terms, so they won't be eligible for the cap if they didn't have it.

So now it's down to one type of mortgage that didn't have the collar on it?

Shoud have said that to start with instead of making out that this new tracker is worse than existing ones

damanpunk

HAMISH_MCTAVISH wrote: »

For sure the original Lloyds TSB (and C&G) mortgages were on an uncollared BOEBR + 2% cap. I have one, and I checked.

I believe the N'wide's 2% cap was also uncollared, but I couldn't confirm this as I don't have one.

The merged banks loans should still be on the original contract terms, so they won't be eligible for the cap if they didn't have it.

Same here with Lloyds TSB, 2.5% currently :beer: