C&G first time buyer mortgage

jonathan1_2

Hi,
I am a first time buyer shopping around for the best mortgage available. We have seen a potential house for £118K and have just over a 10% deposit. I am just looking for somones opinion on the mortgage below:

2 year low start tracker Mortgage (C&G)-
Initial rate: 0.01% below base rate until 31 Dec 2010
5.49% above base rate until 31 July 2012
Followed by: Standard Variable Rate - currently 2.5%



Most new C&G mortgages revert to the 'Homeowner variable rate' when the initail rate finishes (currently 3.99%). This one reverts to the standard variable rate (currently 2.5%).

Im i missing somthing obvious or this this genuinly a good deal, at the end of the first 2 years it seems to be a good mortgage? Id be happy to know your thoughts. Thanks

Cannon_Fodder

0.49% for less than 6 months.
5.99% for 18 months.
SVR to follow-on.

At the end of two years, the base rate could be back at 5% - how would they reflect that? 4.5% (increase in base rate) plus 2.5% (original svr) = 7% ?

And new fixed deals would be priced accordingly, by then, so Fixed might be around the same.

I'd aim for longer than 2 years, or just track on a nil ERC product until rates move.

Thrugelmir

jonathan1 wrote: »

Im i missing somthing obvious or this this genuinly a good deal, at the end of the first 2 years it seems to be a good mortgage? Id be happy to know your thoughts. Thanks

As CannonFodder points out. The C&G is covering its options. As any rise in the base rate will be covered in the first 2 years. In 2 years time the likelihood of .5% base rates are very slim.

If you are at all concerned. Build up a bigger deposit before purchasing.