Making a decision -remortgaging

devon123

Hi everyone

I have an A&L mortgage which when I come to the end of my current 2 year fixed deal (5.79%) I will owe approx 95k on a house worth approx 150k (looking at recent house sales on my road etc.). Deal ends end of April.

I have had 2 x2 year fixes having owned my house for 4 years. At the time I wanted a fixed deal as I was retraining, giving up my job and wanted the security. I now have a secure job (touch wood) and I'm trying to decide whether to go for a tracker deal.

I want to leave A&L as I think their customer service is poor and they also have one of the highest SVRs (4.99) which doesn't bode well in my opinion. I phoned to see what they would offer - 3.09 over base was their best tracker offer.

First Direct are offering a very good deal (well, it looks like that to me!....).

I am looking at the following (borrowing 95k)...the 2.18% would be cheaper in the long term I think. Over a term of 20 years by the way...

Option 1 - BofE tracker +2.49 no fees at all (set up, valuation etc., redemption, exit penalty, unlimited overpayments). Payments roughly £527

Option 2 - BofE tracker +2.18 £999 arrangement fee (can be paid up front), valuation = 99 paid up front, closure fee = 149. Payments roughly £517.

Option 3 - My cautious nature is still wondering whether to plump for a long term tracker (5yrs plus) and be done with it!

I am currently overpaying on my basic mortgage (605) an extra 350 a month and have been doing so for a year. Realistically I could afford monthly payments of up to £1000. When I do my sums, it seems like a tracker deal would be good for me as I could overpay a lot and bring the capital down over the next 18months/2 years, assuming rates stay at a reasonable level.

First Directs SVR is currently 3.69%

Would any experts / the more financially savvy amongst us be prepared to give their opinion?!

I almost went for a tracker 2 years ago but chickened out - DOH! Oh to have a crystal ball :rotfl:

Thanks for reading :beer:

powerwin

Are Option 1 and 2 lifetime trackers??

The fees on Option 2 seem quite low and therefore it seems likely Option 2 could beat Option 1 in terms of overall value.

I would think that any decision on getting a tracker should be based on your ability to deal with a severely adverse move in the BofE base rate. If you can deal with it, then a tracker is more of a possibility. As ever, it's a punt on interest rate movements.

Rgds

devon123

typed this once so it might come up twice!...

Thanks for the advice, it is appreciated. Now I've had a chance to look at it more - wouldn't it take me ages to recoup that £999? I would imagine I'd only stay on it for 18months/2 years, or however interest rates stay lowish. Then I'll look to move. I keep changing my mind about it! :money:

devon123

p.s. yes, both life time trackers.

devon123

anyone else??... :rolleyes: