fixed or tracker for the next two years?

araxes

thanks michaels - my understanding is that it's roughly 3% of the outstanding loan if repaying before the 2 year point (but i don't have the illustration to hand), the tracker is with natwest.

Spangled

What rate does the 3.19% fixed rate mortgage go to after the two years is up? (It probably goes to either a BoE base rate tracker or the bank's SVR.) That could make all the difference in whether you would need to remortgage at the end of the first two years.

nesssie1702

Did you read the article that was in the Guardian on Saturday? It's made me think

http://www.guardian.co.uk/money/2010/jul/31/mortgages-ditch-fix-get-tracker

michaels

I was thinking of 'penalties' (ie sealing fees or whatever) after the 2 years when presumably you would be looking to remortgage to beat svr?

araxes wrote: »

thanks michaels - my understanding is that it's roughly 3% of the outstanding loan if repaying before the 2 year point (but i don't have the illustration to hand), the tracker is with natwest.

Senior_Paper_Monitor

and - playing Devil's Advocate (and one point of our office pushes firmly - and not because we want another set of fees/commissions in 2 years) - how certain are you about jobs, relationships, kids, health (including the direct family's) etc, beyond 2 or 3 years ?

We regularly meet young (generally) mortage holders deserate to escape 5 (or even longer) year commitments and completely hammered by early redemption charges.

There are arguments both ways - make sure you consider both.

smk77

nesssie1702 wrote: »

Did you read the article that was in the Guardian on Saturday? It's made me think

http://www.guardian.co.uk/money/2010/jul/31/mortgages-ditch-fix-get-tracker

That was in Latest MSE News last week:

http://www.moneysavingexpert.com/news/banking/2010/07/could-the-base-rate-stay-at-05-until-2014

It's made me relax about having to jump from my 2.5% @ Nationwide into a fixed rate.

araxes

michaels wrote: »

I was thinking of 'penalties' (ie sealing fees or whatever) after the 2 years when presumably you would be looking to remortgage to beat svr?

to be perfectly honest i don't know the answer to this. will find out.

spangled: it reverts to the santander variable currently 4.24%

SPM: i'm reasonably secure over the next 2 years, i don't know about 5 - i work in the public sector so there'll be a big target painted on my forehead till at least the next election.

SMK and nessie: yes i saw this article which triggered further enquiries into trackers, but from what i can tell it's only ernst and young predicting this at the moment. if other major players started agreeing with them i'd feel more comfortable taking the punt on the tracker.

thanks so much everyone, it's kind of you to take an interest.

getmore4less

I am a great fan of low cost lifetime tackers.
The only time you need to change is when the margins for these get smaller.( I made the mistake of not doing this with my offset at +0.95, I could have gone to +0.17 for a small fee)

Always check the follow on rate for any deal even fixed, if that is competative then it reduces the need to remortgage when he promotional period is up.

It can be worth paying more now on a fix(if you need the security) to get onto a better follow on rate later(Barclays used to be the best for this)

Whats your LTV FD have some good ones with low fees that your broker will probably not mention.

The other trick with a low cost tracker is to save the difference from your fixed option and use this to mitigate rate rises, if they ever come.

gowgowuk

smk77 wrote: »

That was in Latest MSE News last week:

http://www.moneysavingexpert.com/news/banking/2010/07/could-the-base-rate-stay-at-05-until-2014

It's made me relax about having to jump from my 2.5% @ Nationwide into a fixed rate.

Unfortunately for me, last November, I followed the "trend" in these forums which was rather "jump on good fixed rate while there's still time" and switched from my 2.5% Nationwide to a 5y fixed at 4.24%, thinking that "surely interest rate is bound to go up within a year or two". I might very well regret it, but, I guess, that's risk of the game!