Which of these would you choose?

goggle

Given the choice of the following (and only the following 2) mortagge deals, which would you choose in the current market - and why ...

Base rate+2.80% (currently 3.30%) until 30/6/12, followed by "standard rate" of 4.74% (but this is subject to change if rates change!) till June 2015
- total tie in would be 5 yrs, 2 at discount, 3 at std variable

Fixed rate at 4.50% until 30/6/12, followed by "standard rate" of 4.74 (subject to change if rates change big time!) till June 2015
- total tie in would be 5 yrs, 2 at fixed, 3 at std variable


(basically, do you think base rates are going to rocket in the next 2 yrs & make that base rate+2.80% a better or worse deal than the fixed rate one?)

ETA:
there is one more option - a "variable rate" which is currently at 3.9% - obv more than the tracker at present but if rates stay low would be less in yrs 3-5 ...

opinions4u

I'd probably go for the tracker.

I don't think base rate will rocket. It may not even rise this year.

But hey, I could be wrong .

ItMightBeUsefulOneDay

goggle wrote: »

Given the choice of the following (and only the following 2) mortagge deals, which would you choose in the current market - and why ...

Neither in the real world.

But in this world of the choice of two, I'd go with the tracker so I could overpay the difference and therefore has less capital left owing at the end of two years. It would need to be a fairly small mortgage though as its a gamble on rates staying low (they can only go up from here)

Joe_Bloggs

The majority of the time on these deals is going to be at X% on SVR after the discount period. Who is to say what the SVR may track ? A capped tracker would cut down on the uncertainty. What are the early repayment charges to bail out of these deals ?
J_B.

JimmyTheWig

Agree that the variable rate is better than the fixed.
There's no point in paying for the surety of a fixed rate to then be tied in to a variable rate after just 2 years.

It obviously depends on the fees associated with each, though.

I know this isn't what you asked, but is this a first mortgage or are you moving/remortgaging? Because if these are your only two options I would suggest you consider renting for a while until you can get a better deal.

goggle

not for me - a friend
wants an offset mortgage & reckons these are the best deals (Coventry B/S)


I'm out of touch with the mortgage market at present so no idea about good/bad deals on mortgages, but think friend may be better to go with Barclays/Woolwich as the rates seem a lot lower!

getmore4less

goggle wrote: »

not for me - a friend
wants an offset mortgage & reckons these are the best deals (Coventry B/S)


I'm out of touch with the mortgage market at present so no idea about good/bad deals on mortgages, but think friend may be better to go with Barclays/Woolwich as the rates seem a lot lower!

I agreed with the previous poster in this imaginary 2 choice world the tracker.

Both are not good in the real world(5y tie in is a big turn off).

Whats the LTV and salary multiple size of loan are they looking at?

FD have been consistanly good Barclays have been behind on fees but do allow ISAs to be offset.

One of the other offset providers has been up offering good deals but not sure which one it is.