A tough decision for an indecisive person!

devon123

Hi all,

I've just tried to find a thread that I started a few weeks ago but it seems to have disappeared! Getmoreforless posted some really helpful replies so thanks for that

I am due to remortgage at the end of April.

I am currently with A&L on a 2 yr fix @ 5.79%. It reverts to the SVR which is currently 4.99%.

My house was valued a few weeks ago at 145 - 150k. I will owe c.95k by the end of April.

I think I've decided on a tracker but having spoken to A&L yesterday I'm not so sure....

Option 1 - stay with A&L on +2.49% BofE tracker, 2 years, £499 fee
Option 2 - stay with A&L on +2.69% BofE tracker, 2 years, no fee
Option 3 - stay with A&L on 4.99% fixed, 5 years, no fee
Option 4 - Yorkshire BS +2.14% BofE tracker, 2 years, £495 fee

I'd need to pay A&L at £295 exit fee if I leave them as well.

I overpay c. £350 a month so I can afford monthly payments around the £900 mark. My job is secure and I will be getting a payrise in Sept to c. 27k (currently on 24k). I rent a room to a lodger for £350 a month.

Any thoughts on the above? Thanks :beer:

devon123

Also, what do you all think of this article about fixed rates?

http://uk.biz.yahoo.com/11032010/389/fix-mortgage-rate.html

Cannon_Fodder

http://forums.moneysavingexpert.com/showthread.html?t=2305461&highlight ?

A&L 4.99% Fixed for 5 years.

No fees, no exit fee, no different to about-to-be SVR. Cheaper than a 2yr Fix you had. No brainer, imo.

devon123

Thanks Cannon Fodder - not sure what happened when I tried to search for that thread!
I must say my cautious nature is tempted by the fix now. However, if I keep overpaying as I am I can knock an extra 2-3k off the capital in a year (presuming interest rates hover around the same mark they are now).
Would it be stupid to sit tight and wait another month? Or may be until the outcome of the election?

Cannon_Fodder

Its not stupid.

Its a choice/gamble/coin-toss...

Base Rate could be back at 2% in a year, which makes your trackers 4.odd%.

Another year later, 4% base makes Tracker 6.odd% and rising...or not.

Problem is, by the time the markets/industry know that interest rates are going up - which they inevitably will before Joe Public - the Fixed deals will be up above what you have been quoted today, probably.

devon123

Thanks Cannon Fodder.

It is a gamble, and I'm a bit of a rubbish gambler! I almost opted for a tracker 2 years ago when I remortgaged (something like +1% over base) but didn't. Oh well, hindsight is a wonderful thing!

I have reserved the 4.99% 5 year fix for now at no cost. The lady at A&L said it wouldn't affect my credit rating - I hope she is right! She said that in effect I can keep ringing them, see what the latest deal is and keep 'reserving' for as long as I like. They are also offering a 4.69 4 yr fix as well. Both of these are portable but have hefty ERCs @ 5% and 4% respectively for the whole deal. Ouch!

Anyone else got any thoughts? Cheers.

devon123

Also, A&L say they value my house @ 152.5k which is good news! Not sure whether a new lender would use that info if I were to swap from A&L?

getmore4less

Are you sure those A&L deals are no fee

http://www.alliance-leicester.co.uk/mortgages/interest-rates.aspx

devon123

getmoreforless - the woman on the phone said they were no fee. They offer completely different ones for existing customers over the phone. I asked her about 10 times, I'm sure she thought I was mad!