Tracker Vs. Fixed Rate With overpayments

getmore4less

VIGILANT22 wrote: »

getmore4less

FTB.......and yr suggestion.......:rotfl:

FTB is a bit irelevent, it is the borrowers financial position that determines the options that could be suitable to the borrower.

We have a borrower with good visibility of the ablity to overpay more than the usualy allowed on typical fixed rate products during term of the products promotional period .

Why do you think that a mix of borrowing, part with overpayment restrictions and part with more flexable overpayments is not a solution for this borrower to add to the list for consideration?

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dimbo61 wrote: »

Have you considered an offset fixed rate mortgage ?
YBS are doing some of the best deals at the moment ( check out first direct as well )
I have been on a fixed deal with them for the last 4 1/2 years.
Pay in as much as you like into offset account

Good solution for the overpayments.

The problem with the FD fixed offsets is they go onto SVR which has typicaly been higher than the tracker rates( not checked YBS).
Chances are there will be the option to switch but the base differential and fees are a bit of an unknown since FD does play with these a lot.

Matticus

I've just stumbled across this, it looks pretty much exactly what I was talking about.

http://mortgages.hsbc.co.uk/split-loan-mortgages-calculator

Has anyone heard of this before?

getmore4less

I think the catch with that one might be

Both the fixed and tracker mortgage loans will have the same interest rate at the time your mortgage loans are arranged.

The tracker part will start higher than typical trackers, not a big problem if you can tackle that part quickly.

Spangled

Matticus wrote: »

Part of my concern is that current trackers are running at about base rate +4%
So if and when rates return to 5ish I'd be in quite a bad position. Of course as soon as the fix runs out I'd default to the banks SVR so perhaps its not that big of a problem?

If you have a sizeable deposit (35% or more), First Direct are offering a BoEBR + 1.89% lifetime tracker. Unlimited overpayments, no ERCs etc.

Although not as good as some people who took out trackers before the credit crunch (eg BoEBR + 0.5% etc), it's still better than some of the BoEBR +4% trackers out there which I wouldn't touch with a bargepole (for the reasons you outline).

give

If you want to be sure your outgoings aren't going to go up then fix. The tracker is more risky but could save money. Tough call

dimbo61

Like I said 5 year fixed offset then you know how much you have to pay and save,save,save into offset