2yr Fixed or 2yr tracker?

Denny_Crane

I know this is a bit "how long is a piece of string" but after your views.
My 2 year tracker with santander is coming to an end, but due to my wifes credit rating chaning mortgage suppliers is not an option (Nat west bombed us out when i tried and I know too many checks also hurst the CR)

My option on a £116,000 mortgage (13 year term, due to my age, dont want to take past 65) is a 2 year tracker at 2.99% now at £894.77 per month or a 2 year fixed at 3.49% at £922.51 per month, a difference per month of £27.44.

My thought is that at least the fixed gibes me piece of mind for two years, but the tracker is cheaper, but (and this is where the piece of string comes in) who knows what the BOE will do over the next two years?

as with a lot of people, money is tight each month.

You thoughts please?

thankls in advance

Denny_Crane

opinions4u wrote: »

Do they not have a longer term option? Perhaps 5 years?

They do, but the cost is 3.79%

TrickyDicky101

Denny_Crane wrote: »

They do, but the cost is 3.79%

That will have !!!!!! all difference on the amount you pay per month for 5 years' surety. You have a short-ish term remaining so marginal changes in rates won't have a significant impact on your monthly repayments.

Denny_Crane

TrickyDicky101 wrote: »

That will have !!!!!! all difference on the amount you pay per month for 5 years' surety. You have a short-ish term remaining so marginal changes in rates won't have a significant impact on your monthly repayments.

Plus a £999 set up fee! :eek:

GMS

The difference between the 2 yr fixed and tracker is quite small so if you want the security of knowing then work out if you would be happy to pay the extra.

As opinions4u suggests why not look at a longer term fixed if you are wanting stability. It will cost you more in the short term when compared to a 2 year deal but rates will not stay as they are for an extended period.

When base rate rises so to will the fixed rates available, and obviously trackers will rise in line with base rates. If you took a 2 year fixed you may end up cursing not taking a longer term fix when rates in 2 years are higher.

Denny_Crane

many thanks all for the replies

getmore4less

A 2 year fix or tracker don't do much you end up back where you started on SVR

Don't they have a lifetime tracker so no more fees?

Denny_Crane

getmore4less wrote: »

A 2 year fix or tracker don't do much you end up back where you started on SVR

Don't they have a lifetime tracker so no more fees?

No, not available at the moment :-(

opinions4u

£999 fee over 5 years is roughly the same as 0.2% a year.

So if your question is

1) Tracker at 2.99% for 2 years
2) Fix at 3.49% for 2 years
3) Fix at 3.99% for 5 years

then option (3) would be my suggestion. Value the fee over 5 years - for me the longer term fix is a no-brainer.

dimbo61

Find out if you can overpay and by how much each month and set up your DD for that amount so in 5 years time you mortgage is much smaller.

TrickyDicky101

Something we haven't considered is remaining on whatever your current SVR is - what rate are you currently paying? As I commented, because of the limited term of the mortgage (eg compared to a 'normal' 25 year term that is) you are somewhat insulated against changes in rates (most of your monthly repayments are capital, not interest and these elements won't vary irrespective of the interest rate).