Base mortgage rate or capped tracker?

tambotaylor

Hi everyone,

At the end of October our fixed rate mortgage will come to an end (5.34%) and we will revert to the base mortgage rate of 2% above the base rate equating to 2.5%. This would mean that we save £263 a month off our mortgage repayments. The big dilemma is whether to take a chance on interests remaining the same for the next year and save like mad or take out a capped tracker with Nationwide that starts at 3.99% and is capped at 4.99%, this also has an arrangement fee of £1500 and would be added to the mortgage. The final bit of information is that we are thinking of trying for another child and so my wifes income may drop by £200 a month. What would you do? Your comments would be much appreciated.

Thanks

_Andy_

How long is the capped tracker for?

dimbo61

Looks like a 3 year deal on there web site!

tambotaylor

Hi Andy,

It's capped for 3 years

Thanks

dimbo61

What do you think is the current LTV?
How much is your mortgage for ?
What do you and your wife earn ?
How much in savings?
Can you overpay ?are you already overpaying ?
Could you afford your mortgage if rates went up to 6/7/8%

tambotaylor

1.Based on Nationwide's valuation, LTV is at 95%
2.Mortgage is for £151,100
3. Current joint take home of £2900
4. £1500 in savings
5. We can overpay but are not currently (the term of the mortgage is 38 years which we took to keep repayments down initially).
6. We could probably scrape to 8% if rates went up but would have nothing left to save