Best tracker for short term

johnbhoy10

My current fixed with YBS of 4.99% ends on 28th Feb(goes onto their svr of 4.99% after this) and i'm looking at going onto a tracker rate. FirstDirect seem to be the best option-

No fees (they refund legal costs up to £400-i'm told by my paralegal
sister-in-law this should be sufficient)
Rate of BOE+2.49% for term.
Most important there are no redemption fees for leaving.
Also, this mortgage has an offset facility but i don't have significant savings so will really just use it as a tracker.

My thinking is that i may benefit from lower rates(even for a wee while) and then look for a fixed if there are significant interset rate rises.
My LTV is approx 60% with £77k borrowing against valuation of £135k.
Any opinions would be greatfully received.:D

Rob71

This is similar to a fee-free mortgage I took out with HSBC a month or so back...

I was told that these deals tend to move quite quickly (First Direct being HSBC), so if you're interested in getting it, I'd make a call to them and see what they have to say.

I think that 3% at the moment over a term of two years is quite sensible and the fact there are no upfront costs makes it really attractive - certainly more so than YBS' SVR!

Are you sure about those early redemption fees though?

dimbo61

The difference between a £77,000 mortgage at 4.99% £320.19 IO a month in interest and 2.99% £191.86 IO a month is nearly £130 a month.
If you can get a fee free ? deal from First Direct should save you money after a few months ( dont forget exit fee from YBS!)
If you can put this saving each month into the offset account to help reduce the mortgage balance even quicker.

johnbhoy10

Thanks for your replies-a couple of things i should add-i have actually being offered the deal pending valuation. It is valid for six months but obviously BOE may change. Rob-the deal is for term and not for 2 years but that can work both ways. Obviously rates can't go any lower but if they STAY relatively low even for a year i should benefit. At the moment i'm paying-

£467 pm (£333 int + £134capital) . £80000 at 4.99 over 25 years

The new FD deal would be-

£192 pm interest only. I can then made ad-hoc capital payements at any time. So the way i seeit is that at the moment i clear £1608 (12 X 134) off the mortgage every year. If i can pay that asap or even in a one-off early in the year anything else that i may add towards it is better than i'm currently doing.

ps-i think the deal that would have really suited me was the co-op capped tracker that was kicking around in the summer but it was withdrawn before i knew it was available.

Gorgeous_George

You can save in the offset and have immediate access to your savings. Overpaying instead removes that flexibility.

The FD deal is the one I would go with if my mortgage deal was expiring.

GG

johnbhoy10

Thanks for the reply GG-i think i follow-so even if i have small savings in the offset (first account/one account i think it's called) i can get access straight away but should i not need them obviously they will reduce interest on the borrowing. I like the flexibility of this. Don't get me wrong i think i will be changing this deal soon (because of rising rates) but i least i will have the option because of no erc. My current lender the YBS are just not interested! I realise their hands are tied by their limited product range but there are ways of dealing with customers. Vote with your feet people!!

dimbo61

I am with YBS and very happy with the customer service and local branch
I have a fixed offset mortgage with one year left then tracker BOE +
The problem that YBS and lots of other building societies now face is the mess RE amount of money in case other societies go BUMP
A case of closing the gate after the horse has bolted
Cant pay savers good rates and stuck with low trackers