Tracker mortgae advice

Nurseshark

I know absolutely nothing about mortages and money (other than how to spend it :rolleyes:).
In 2008 we took out a two year tracker with the Co-operative and have really benefited financially from the big drop in interest rates, especially as it meant I could take a few extra months maternity leave.
Now I am back at work (on less hours) and am beginning to worry about the step rise in mortgage repayments we will be hit by next june (2010) when the tracker ends.

Does anyone have any advice about whether we should go for another tracker or how to get the best deal, should be stick with our exisisting mortgage lender.

I am sorry if someone has already asked this question. I am new to forums and not quite sure what I am doing.

Peelerfart

Hi Nursey,

Any idea what your LTV is ?

opinions4u

Nurseshark wrote: »

In 2008 we took out a two year tracker with the Co-operative and have really benefited financially from the big drop in interest rates, especially as it meant I could take a few extra months maternity leave.

Now I am back at work (on less hours) and am beginning to worry about the step rise in mortgage repayments we will be hit by next june (2010) when the tracker ends.

You need to check what happens in June. Does your mortgage go on to their standard variable rate (SVR) which currently sits at 4.24%, or does it do something else? You Key Facts document should clarify this.

Assuming it's the SVR, that rate is probably lower than the rate when you took the mortgage out. You may want to calculate what the difference is between the monthly payment now and the monthly payment at the time you took the loan out.

Then either (a) overpay the mortgage if the mortgage allows this or (b) save the money with a view to reducing the debt (or subsidising potentially higher payments) come June.

Does anyone have any advice about whether we should go for another tracker or how to get the best deal, should be stick with our exisisting mortgage lender.

To be honest, I'd say ask the question in March next year. Keep an eye on sites like www.moneyfacts.co.uk where current mortgage deals are available.

Also, know your loan to value (LTV). e.g. if your loan is more than 90% of the current value of your house you won't be able to remortgage elsewhwere.

I am sorry if someone has already asked this question. I am new to forums and not quite sure what I am doing.

It's a common question, but different people have different circumstances at different times, so you're right to ask.

I'm impressed that you're looking ahead so far - while nobody can tell you what interest rates will be in 3 months, let alone 9, the country would be a lot better off today if people spent more time planning ahead and making contingency plans!

corgi22

nurseshark, like myself you are starting to be slightly more aware of the possible rise in interest rates!!! my only input i can give you, and i know its not much, is that the interest rates are UNLIKELY to rise to anywhere near the fixed rate you started on, within the next year. what i am personally goin to do is keep my tracker going until the lowest fixed rate available matches the amount of approx 75% of what i can afford to pay each mnth. this way i am not stretching myself, and am also keeping the lowest rte on tracker for as long as possible. also if you can 'beat the system' for one more year, you will not face a hefty redemption settlement figure and can forget about adding this sum to your remortgage total.