Silly interest rate question

Impet_Limpet

Our fixed rate deal finished last month

In the paper work (from Feb 2008) it says "a fixed rate of 6.89% until 28th February 2010, followed by a variable rate which is 1.99% above the Bank of England repo rate (or it successor), currently 5.25% for the remaining term of the mortgage, to give a current rate payable of 7.24%.."

I've had confirmation via letter that this will be 2.49%.

Does this effectively mean we are on some sort of tracker type rather than at the mercy of a lenders SVR?

chirpchirp

Yes lucky you. I am too!

Jonbvn

Martine1081 wrote: »

I've had confirmation via letter that this will be 2.49%.

Does this effectively mean we are on some sort of tracker type rather than at the mercy of a lenders SVR?

Certainly sounds like it. Welcome to significantly reduced mortgage payments!

BTW, given that this is the MFW board, I would suggest that you save the difference in mortgage payments. A&L currently offer a cash ISA paying 3.5% which beats your new mortgage rate.

Impet_Limpet

I hadn't thought of putting it into savings, I'd just set up a standing order to move the difference to The mortgage works to pay extra off the mortgage. I've already paid off £1111 in the last year of our fixed rate when my student loan came in (our mortgage is over 90k).

We've already contributed to our ISAs in this cash year and had planned to use next years for a holiday.

I'll have a re-jig round I think

delmar39

Martine1081 wrote: »

Our fixed rate deal finished last month

In the paper work (from Feb 2008) it says "a fixed rate of 6.89% until 28th February 2010, followed by a variable rate which is 1.99% above the Bank of England repo rate (or it successor), currently 5.25% for the remaining term of the mortgage, to give a current rate payable of 7.24%.."

I've had confirmation via letter that this will be 2.49%.

Does this effectively mean we are on some sort of tracker type rather than at the mercy of a lenders SVR?

It could be the standard variable rate, which on new products is no longer available - I think they now call it the Base Morgage Rate, which is currently 3.99% at our bank. It should say in the contract what rate you mortgage will revert to i.e. SVR. A tracker is normally a product you would apply for. Due to SVRs being so low, they are now a better deal than they used to be and significantly lower than any fixed deals you'll get (mostly). It's great to be in this position, but just be careful. If rates rise, so will fixed deals so cheaper long term products may become out of reach.

getmore4less

delmar39 wrote: »

It could be the standard variable rate, which on new products is no longer available - I think they now call it the Base Morgage Rate, which is currently 3.99% at our bank. It should say in the contract what rate you mortgage will revert to i.e. SVR. A tracker is normally a product you would apply for. Due to SVRs being so low, they are now a better deal than they used to be and significantly lower than any fixed deals you'll get (mostly). It's great to be in this position, but just be careful. If rates rise, so will fixed deals so cheaper long term products may become out of reach.

Many products revert to base rate trackers and not SVR that can be changed by the lender.

Barclays have been doing this for years to their own base rate(which has always tracked base rate so far).