Tracker v Discount

cOnfused_4-2

Hi

I have always chose fixed rate deals in the past so not as sure what decision to make this time as I'm in a situation were I can take the risk with payments going up or down. Have found these deals ...

1. Fee 249 Rate 2.49% Discount 2 yrs -1.45%
2. Fee 245 Rate 2.99% Discount 2 yrs -2.5% NO ERC!!!!
3. Fee 995 Rate 2.99% Capped tracker 5 yrs BR +2.49% capped at 5.99%

mortgage 106000 house value 180000

so my query is are these deals ok? Also is a tracker 'safer' as its based on Base rate instead of a SVR set by an individual bank with a discount?

Thank you

cOnfused_4-2

Bumping......

Spangled

Quite a few posters on this board have been stiffed by their banks not reducing their SVRs by as much as other banks.

Tracking the BoE base rate is a safer form of tracking — although some banks have good history in reducing their SVRs by a fair and proportionate amount. If you say from which banks these three deals come from, other posters may be able to tell you whether their SVRs have been competitive historically or not.

A +2.49% margin is quite high although the 5.99% cap is a good fallback, meaning you're protected if the BoE BR goes above 3.5% — which most would wager is almost certain to do at some point in the next five years.

cOnfused_4-2

That's what I was wondering whether banks can just shaft you if they need more income....banks are below...thank you

1 is HSBC
2 is Market Harborough BS
3 is Co-op

opinions4u

Unless the ERCs are a problem for you, the Co-op deal looks good.

Many people are paying up towards the 6% mark for a 5 year fix at the moment, you effectively have a guaranteed cheaper option than that.

2.49% for a 5 year tracker is a good call in the current market.

cOnfused_4-2

Thanks...
I thought the capped looked good and has the safety barrier of rates not going through the roof. I had already booked a 5 year fixed deal at 4.54% which now looking at the co-op deal seams not as good when I can benefit from the lower rate for maybe a few months...or years! It didn't cost me anything to book it but runs out next month so trying to make sure I don't make a bad decision.