End of promotional tracker rate

irwaite

I'm coming to the end of a 2 year tracker rate of base +0.34 and looking what to do next. I thought I would fix as rates can't get any lower.

However, I've checked with my current lender and I will move to another tracker when the 2 years is up (base + 1.00 for the term of the mortgage). This seems too good to be true, especially when short term fixed rates seem to be around 4% and you don't seem to be able to get a base rate tracker at anything like base + 1.00.

My gut instinct has always been to remortgage as your current lender will not offer you as good a deal as being a new customer elsewhere, but this seems an excellent deal as base would have to rise significantly to be worse off. Am I missing anything??

Cannon_Fodder

Any fees to get into or out of the new deal?

If rates shoot up, you might want to jump ship.

VIGILANT22

i dont think fees are a worry at 1.5...you can easily whack your mortgage down in this time even with a 1/2/3 % increase

irwaite

No, no fees

Gorgeous_George

A tracker at +1% is ridiculously cheap. For me it would be a no-brainer but it depends on how long you have left, how much you owe etc.

I'd be looking at going interest only and saving the difference at the highest available rate. Then, when rates return to normal and your mortgage rate is higher than the net interest rate on the savings, pay a lump sum off the mortgage.

Of course, if you NEED the security of a fixed rate then that is the answer.

GG

louisdog

Is your lender IF? It sounds like it might be one of their tracker deals which was always going to go to a lifetime 1% - if you check your original paperwork and that is the case, then there shouldn't be any extra fees I guess..

Looney_Toon

No fees and +1% over base sounds fantastic. As an average punter, i've only seen +2.5% trackers over the last few days at best. Put this against a remortgage 2 year fixed at 3.99% no fees (which i've just plumped for), and the decision is pretty tricky... but at +1%... snap it up!:T

getmore4less

Base + 1% follow on rate fantastic.

Stick with it and overpay/save at the rates you would be fixing at and you will almost certainly stay ahead of just about any deal out there.

The only thing that might get close to this is a LONG(6+) term fix but that only works if rates rocket, short term fixes are no good.

Chances are there will never be anywhere as cheap as this again for a long time most new deals that come with small + in the future(if rates go up) will have collars.

louisdog

What's a collar? Does that mean that if rates are 5% in future and you take a base +1% tracker, it may have like a floor (E.g. 2%) it won't go under?

Thanks!

hillcats

irwaite wrote: »

I've checked with my current lender and I will move to another tracker when the 2 years is up (base + 1.00 for the term of the mortgage).

Just one small point which nobody else appears to have mentioned!
You state "BASE + 1%" now, is this the BofE base rate + 1% or your own mortgage company' base rate + 1% - It COULD make a massive difference as they can just up their own base rate tomorrow to 4% as they please, whereas a BofE tracker would be different. See my point ??

FiscalFanny

Absolutely agree with Hillcats - this sound as if it could be THEIR base rate not the BoE base rate. The last time you could get a BoE plus 1% tracker was over 18 months ago ( I know, I got in sharpish), the lowest recently is significantly more than that...check carefully.

If it sounds too good to be true - it usually is!

Fanny x