The end is nigh!

devon123

Hi all,

My 2 year fixed with A&L ends at the end of this month (5.79%), I will then go on to their SVR of 4.99%.

A&L have offered me 4.99% fixed for 5 years with no fees to pay at all. That seems fairly competitive to me and also hassle free! Their trackers aren't much cop and I'd loathe to come out of a 2 year tracker just as rates are raising fast (my speculation there of course!!).

I was also interested in the FIrst Direct lifetime tracker with no tie-ins and a +1.89 rate. That has a 499 fee though and then valuation, solicitor plus the £295 I'd have to pay for the pleasure of saying ta-ra to A&L.

I earn £24,600, my house is worth £145-150k according to local estate agent and £153k according to A&L (not sure how they work that out!?). I owe £95k. I currently pay £605 a month and overpay by £350 so I could afford a hike in rates but I've tried really hard over the last 18months to reduce debt by overpaying.

What would you do folks? Thanks :beer:

Cannon_Fodder

I would take the 5 year fix.

Even though the FD tracker would be 2.39%, and quite appealling, in a year it could be 4%, in two years 6%...

Then you would need to find a second set of fees/costs, and the good deals would have disappeared.

JA1000

How much would interest rates have to rise by to exceed the fixed rate against the tracker. I woudn't fix for 5 years, had I done that 2 years ago I wouldn't have a 1.5% rate now.

The only way is up but as rates do rise there will be more 'room' for lenders to be flexible.

How much would you be overpaying on your current payments at a tracker rate and how much would they have to rise to cancel out hte 4.99% deal. I think you could be overpaying on a lower rate by about £500-600 per year thats a lot of your mortgage in the next 12 months. Even if rates go up they wont shoot up.

getmore4less

Look at the numbers.

£95k @ 4.99% paying £955pm, end of 5 years you owe £56,929.14

£96500 @ 2.39%(variable) paying £955pm (assumes fees of £1500 total)

say the rate stays low then goes up
amount left after yx : rate rise to be worse off than the fix
y1 £87,245.41 5.32%
y2 £77,767.20 6.64%
y3 £68,059.96 9.37%
y4 £58,118.16 17.83%
y5 £47,936.12 (up to £9k better off)

rate rises but how fast and when thats the call.

devon123

Thank you both for your comments.

JA1000 - 'How much would interest rates have to rise by to exceed the fixed rate against the tracker' - I don't know, how would I go about working this out?

I'm tempted to keep 'renewing' my A&L offer every 4 weeks and see what happens after the election. WIll this affect my credit rating if it's with the same lender I am currently with?

JA1000

Why do you have to keep renewing - just leave it, it is them who are encouraging you. When they have you on a contract fixed for 5 years it looks better on their books, whereas you would be able to move out at anytime!!

devon123

JA1000 - the offer stands for 14 days (but the woman said on the phone they actually allow 28 days) and then lapses. I thought this was normal?

getmoreforless - thanks, I think our posts crossed. So the percentages you have stated there indicate that even if the interest rate was 17.83 by the end of year 4 on the tracker, then I'd still be better off with the tracker? I think I've misunderstood...

VIGILANT22

If you can take substantial rate rises why the continual posting asking what rates are better & the desperation of being offered a new deal??..

devon123

Who rattled your cage Vigilant22?! :rotfl:
Having said that, I have noticed you like to jump on threads just to post things that are pointless, irrelevant and with a view to wind people up! Simple things and all that...

VIGILANT22

ha ha..."nobody rattled my cage"!..(so rude)...just as you noticed me, I noticed you...

Quote: Their trackers aren't much cop and I'd loathe to come out of a 2 year tracker just as rates are raising fast (my speculation there of course!!).....I was also interested in the FIrst Direct lifetime tracker with no tie-ins and a +1.89 rate.

I feel someone who is confused does draw attention to themself's on a a forum where they post their details.....

You have posted lots of times on here....so it is not unusual people become aware of you and "yr dilemma"

what was that about simple???

devon123

*yawn*

Thanks to everyone else who has replied, it does help me out a lot. It's good to get lots of different opinions over a period of time.

Getmoreforless- did you use locoblade's calculator to work that out?