Fixed term coming to an end...options?

engineer398

Hi.
My fixed term is coming to an end. I got a letter from santander saying i will be going onto a tracker rate (1.49%) Is this wise?

I WAS paying £642 per month, which was 5yrs fixed at 5.25% over 35yrs - Now this is now finishing.

Santander has told me i will be paying £419 per month...of course i will be saving £220 extra.
However the new figure of £419, is this interest only, or capital aswell?

What are my options??

Thanks

smcqis

Usually you would go on a variable. Is this tracker 1.49 above base rate, how long for? Souns like you need to ask more questions

GuidoT

Stay on the 1.49% and pay the differential you are saving towards the capital.

It is (extremely) wise to go on the 1.49%.

If your fixed rate deal was capital and repayment then the new figure will be on the same basis.

katsu

If your old mortgage was repayment, then you are still repaying capital at the end of the fixed rate deal, it is just that the interest rate is lower.

Clear debts, save an emergency fund or use the money to overpay your mortgage! That way, when rates rise, you will not have got used to spending the extra

Your options are to stay on this new rate or remortgage to a new deal with another provider.

TrickyDicky101

What was the original terms of the mortgage ie was it repayment or interest-only basis - this will continue once off of your tracker. If your tracker is 1.49% over Bank Of England Base Rate then I would suggest that is a very valuable rate to hold onto. If, however, it is a tracker over the bank's own variable rate then it is much less desirable.

35years is a lengthy term which means you won't have repaid much capital if on a repayment basis (obviously none at all if interest-only). What is important to you - fixed, certain monthly amounts, or potential to reap benefits from a variable rate?

engineer398

TrickyDicky101 wrote: »

What was the original terms of the mortgage ie was it repayment or interest-only basis - this will continue once off of your tracker. If your tracker is 1.49% over Bank Of England Base Rate then I would suggest that is a very valuable rate to hold onto. If, however, it is a tracker over the bank's own variable rate then it is much less desirable.

35years is a lengthy term which means you won't have repaid much capital if on a repayment basis (obviously none at all if interest-only). What is important to you - fixed, certain monthly amounts, or potential to reap benefits from a variable rate?

My original rate was fixed - paying capital and interest.

I think i'll make more calls to them.

wodgerdodger

Was it Santander or Alliance & Leicester originally?. Many of the A&L's products around 2006 including fixed rates had a follow on rate of Bank Base plus 0.99% with no tie in for the remaining term. The product is also portable.
I would suggest that you stick with this as is unmatchable and if able, overpay to a level you can afford assuming it was also their flexible option allowing you to reduce term and or take payment holidays and drawdown.