Mortgage Advice

L123

Hi, I need some advice on a mortgage please. I am a first time buyer with a 20% deposit on a property. I am not unsure which mortgage to go for - whether to go for a 2 year tracker mortgage or a fixed mortgage. The tracker mortgage is around £100 less than the fixed mortgage per month. People I have spoken to have advised that the mortgage rate is unlikely to go up untill after the election in June / July however, it will obviously go up eventually. I have also been told that if I were to go for the tracker mortage, the payment I will pay would have to rise eight times to match the fixed monthly payment and that in two years this is unlikely to happen. Obviously, I can budget if I go with the fixed mortgage but on the other hand if I go with the tracker mortgage, I'll save at least £100 per month for when the prices do go up. Does anyone have any thoughts on what I should do?

Cannon_Fodder

The base rate dropped like this;




In six stages, over 6 months. 1.5% chunk, 1% chunk, some 0.5% and 0.25% chunks.


It is pure guesswork how it will increase. It might go up in 2% chunks 3 times in 1 year. Or in 0.5% chunks every couple of months. Or 1% chunks every 6 months. Or up and down like a yo-yo.

You could pick a tracker that has no exit fees, not forgetting to review around the election.

Trouble is, if the polls are showing a leaning towards one winner or another, the Fixed rates could be rising ahead of the election and you may end up Fixing for 2 years on something £50 a month more expensive than it is now, which means paying over £1200 extra in those 2 years compared to Fixing now.

Or not. Annoying, isn't it?

(ps election is likely to be May)