Yorkshire or first direct?

lorra62

Any advice appreciated,
shall I stick with my yorkshire building society mortgage.
just finished a 5 year fixed at 4.84% owe £39000 on a house valued at £250,000.
The rate will be 0.75% above base rate. although it is capped at 3.75%, so I have got room for some interest rate rises.
or
Should I move to the First direct 5 year fixed at 3.89%, fee free. I have been offered the rate and have 5 days to decide what to do. I have requested £50,000 with first direct, so I can carry out some improvements at home.
When I was on the fixed rate of 4.84 at yorkshire. I did enquire about extra borrowing but they said I had to take out an improvement loan at well above the normal rate and couldnt just add the money to the mortgage at the time. I think I could probably
get the extra money now as I wont be tied to the fixed rate, but the chances are they would want me to take out a new mortgage for the whole amount which I am sure wont be on my current rate. Hope that makes sense.

[Deleted User]

Disregarding the extra funds you want for a moment, why would you ditch a current rate of 1.25% and that cannot rise above 3.75%, for one that is fixed at 3.89% and can rise after that time?

Your current deal is the most remarkable one I've ever heard of and I would cling on to it for ever.

lorra62

I think I have written it wrong, it is 0.75 above the base rate officially, but the yorkshire bs have a cap that they wont go below which
is 3.75. That is one of the reasons I am thinking of leaving, because they are not honouring the 0.75 above baserate which was stated on every statement I have received. that was the reason I stuck with the original fix in the last year because I was looking forward to going on a very low rate, which hasnt happened? sorry for the confusion.

[Deleted User]

Ah - I see. My misunderstanding I think.

Matter of taste then, I think. Base rate will need to rise 2.5% before your actual mortgage rate goes up. Which won't happen any time soon, but I would guess within the next 5 years certainly.

If you're looking for security, I think the FD deal is hard to beat.

Given that the FD rate has now been pulled (for those who haven't already secured it, like you) I would personally go for it, given the minimal difference between that and your current rate.

paulfaz

I'd 'take' the FD fix for now. You've then got it on hold for six months. As mentioned it's already been pulled so shows what a good deal it was - it could look even better in a few months.

Look at the options over the next few months and you can decide whether to take it or not at any time up to the six months point - if you don't switch to FD then you will only lose the £99 arrangement fee.