Ditched my fix, now what?

Emmalou

In January we ditched our 5.39% 5 year fix (at the end of the 2nd year) and paid about 4.5K for the pleasure. The mortgage was 225K but as the ERC was added onto the mortgage is is now back up to about 229K.

Our LTV at the time was around 60%.

We switched to a lifetime tracker of 1.89% above base and, at the same time, reserved a 3.89% 5 year fix with the same lender for 6 months. It will cost about £150 to come out of the tracker and we have already paid the £99 arrangement fee for the fix. It is a repayment mortgage. After the 5 years are up, the fixed rate would revert to an SVR of 3.69% or thereabouts.

Now the time has come to decide whether to stay on the tracker, or change to the fix. The difference is monthly payments is about £160 (which is affordable but still a bit of a squeeze).

Does anybody have any words of wisdom or any other thoughts to help with our tricky decision? :cool:

getmore4less

£225000 @ 5.39% paying £1367pm after 3years £211,108.75
£229500 @ 2.39% paying £1367pm after 3 years £195,575.24
nice saving
£229500 @ 3.89% paying £1367pm after 3 years £205,750.23
not so nice a saving.

do you feel £10k lucky on rates?</B></B>

GAH

Tracker Mortgages are a gamble, the news in media seems to think that Base Rate won't rise until the end of the year, but one thing is for sure, it will only go one way from now.

Bare in mind when Base rate does go up, that lenders will change all their fixed rate deals.

I myself am very happy with a tracker at present, but I know I can comfortbaly afford it even if rates shoot through the roof.

Gorgeous_George

You could reserve another fix.

The delta between a fixed rate and a tracker is the price you pay for peace of mind. The downside is akin to when you don't claim on you house insurance and it seems like a waste of money.

Another option is to have half tracker and half fixed.

GG