Local government officer who is a FTB and confused

Spangled

mavala25 wrote: »

I really do appreciate people taking the time to reply, i really do but please can someone ask the specific question, fixed or tracker for 2 years in the circumstances i have described.
Please can we not mention the 5 year thing again, its not an option here and something to lenghthy for me to get into as to the whys and why nots.

What do both deals revert to at the end of the two years? The lender's SVR? That will have a bearing on what deal to take. And what is the difference (if any) in the application fees for each deal?

(That said, I still think both deals are poor. If the BoEBR goes up to 5.5% (which is what it was prior to the credit crunch) then you'll be paying 9.14% (5.5% + 3.64%) on the tracker. :eek: And the fixed deal isn't — IMO — worth it for the reasons I outlined earlier. But I digress.)

mavala25

Hi Spangled

Cheers for that

The fee for both tracker and fixed is pretty similar (£950-£1000).

Your correct, after the 2 year term it does go to the lenders SVR for both.

Spangled

In that case you have to decide whether you think the BoEBR will go up by 0.75% or more (thereby making the tracker more expensive than the fixed) and at what point in the duration of the two-year deal.

Common consensus (no guide to reality of course!) is that if IRs do go up within the next year, it will be 0.25% at a time. So the tracker would *likely* work out marginally cheaper for the duration of the two years.

But no one has a crystal ball and it all depends on a) your attitude to risk and b) your financial ability to cope with potentially increased payments.

Final point - who is the lender and what is their current SVR? Different lenders have historically different SVRs...

Spangled

PS Final point - it also depends on the size of your mortgage. If you have a relatively small mortgage (say 60k or 70k) then any interest rate rises if you're on a tracker won't affect you as much as if you have a 200k mortgage...

mavala25

Thanks Spangled


The lender is The Mortgage works, their svr is 4.79
im borrowing £158000

Crinz

Im not going to give an opinion on this but mearly express a bit of concern that you feel the need to ask this question on a public forum.

People on here mark themselves out as brokers/mortgage advisers using Martin's required signature. No one checks if any of this information is true.

What you are asking for here is running very very close to advice and something that you should be getting from a mortgage adviser who has a degree (albeit not a huge one) of accountability to any advice he/she has given you.

If anyone on here is able to tell you to go for a tracker or fixed rate product without first asking you 30 minutes of questions that back up how they came to that decision then I must be doing something wrong in my job.

Go and see your mortgage adviser and ask which one is right for you


This is not aimed at anyone in particular who has posted here, just expressing concern

mavala25

Hi Crinz

Im just asking for everday folks opinions on this.
If you read my original question carefuly you will see I wanted peoples opinions on whether they would take the risks of lower payments versus those of higher fixed payments in the face of possible redundancy. I didnt ask what people thought interest rates would go uo to and when. Just opinons from real people who may or might have been in similar situations.
Thanks very much for your concerns though...