Should I fix my tracker

blondegirl88

Hi,

Im on a nationwide 3 yr tracker with a rate of 2.64 + base rate. Nationwide have a facility to fix mid term to a nationwide fixed term without paying ERC. Their current deals are 2yrs 4.19%, 3 yrs 4.49% and 5 years 5.09%. We have 2.5 years left with a balance of £126,419.40 and are overpaying £500/mth. Should we fix or carrying on as we are. Both of us are fixed term workers and although I have had a continuous contract for the last 9 years both of us are also in the public sector.

Any advice gratefully received.:D

Burridge60

I would have thought your main priority would be to seek redundancy or unemployment insurance on both of you to protect you if the current economic climate hurts Local Government Officers or NHS hard. It is however very likely that your job situations might make such cover impossible to obtain but you will need to check out with the insurers.

If you cant get Insurance then save like mad. Being unable to pay your mortgage will hurt you a lot more than saving a few quid by being on the right rate at the right time.

blondegirl88

Hi,

I have already got redundancy insurance that was taken out when we first bought the house. My other half couldn't get cover as he had only recently started a permanent contract. Needless to say 10 Months later the permanent contract is no more and he is now fixed term till end of March. We have £18,000 in savings so can afford to cover the mortgage for at least 10 months but obviously prefer not to wipe out our savings. I will also get some redundancy money if I can't get a another contract.

Burridge60

blondegirl88 wrote: »

We have £18,000 in savings so can afford to cover the mortgage for at least 10 months but obviously prefer not to wipe out our savings. I will also get some redundancy money if I can't get a another contract.

You look to be very well placed and have thought about your security of mortgage payment.

There are other posts made by me about working out how much you could afford to pay each month to your mortgage.

Pick rates and use an online mortgage calculator to see how much different rates would cause you to pay each month. If those rates generate a monthly payment that makes you shudder then a fixed rate would be worth thinking about. If the payment could be accommodated within your budget as it stands then the tracker might be worth persevering with and overpaying the mortgage or into a savings account if you prefer more savings.

Thrugelmir

While in employment and interest rates are low. Continue overpaying your mortgage as you are doing.

With an additional £500 per month you are making considerable inroads into your mortgage debt.

Longer term the benefit will be a much improved LTV which will open up other mortgage opportunities.