SVR better than my fixed rate - confused!!

thenap80

My fixed rate mortgage with Santander which is 5.72% ends in June and I have been sent a letter by them advising I call for a better reate before I move to SVR, which is according to the letter, 4.65% (4 point something anyway!)

I rang them and they were offering me fixed rates which had a rate higher than this SVR and I said to the woman, why would I change - am I missing something. Surely I'd just stay on the SVR. She said she could not advise either way.

SO it is advice I seek please from u money saving experts!!

I have about 40k left to pay and will hopefully clear that in less than two years by paying as much as possible each month. AM I stupid to stay on SVR as I was always told it would be wrong but with the figures Santander gave me, I appear better on it and I wont have any early repayment charges then either. I'm confused somewhat!!

Thanks

JPS29

If you can pay £40k in two years then IMO I would stay on the SVR. INterest rates will go up no one can tell when but it's highly unlikely they will shoot up in the next 2 years.

thenap80

I fotget to ask also...would a tracker mortgage be suited to me if I want to pay off within two years. I dont understand mortgages too much but know I dont wanna be limited to how much I can overpay.

Thanks

TrickyDicky101

Since you are repaying (or plan to) over 2 years, the interest rate is of relatively lowly importance to you because your repayments will consist mostly of capital each month. Hence, I would suggest it is highly unlikely to be worth your while going for any fixed rate/tracker deal IF that deal carries a high arrangement fee. I would stay on the SVR.

noodle

thenap80 wrote: »

I rang them and they were offering me fixed rates which had a rate higher than this SVR and I said to the woman, why would I change - am I missing something. Surely I'd just stay on the SVR. She said she could not advise either way.

You would change if you were worried about interest rates going up and it being more expensive, in the long run, for be on a variable rate.. or if you felt that you needed the absolute security of knowing that your rate would not change.

As others have noted, in your case it seems like a variable right is the right thing to be on - so find the lowest one you can (tracker or otherwise) bearing in mind that with your payment timescale you probably don't want a product with fees (unless the rate is much better than others available) and you, as stated, need to ensure there are no overpayment penalties.

wodgerdodger

I think you will find that Santander have a Flexible Tracker for 2 years at 4.23% with fee of £300. We were offered this when porting our current A&L mortgage this month ;wasnt a bad rate, but in fact the existing one we had was superior so staying with that.

We didnt research market as quite happy with A&L over the last 20 odd years and despite comments I,ve read their service has been overall as good as anyones. If any Lender has a market leading product you can normally guarantee service levels will deteriorate rapidly...a case of devil you know.