Which would you choose?

The_Palmist

Just answering your original question Suzy, I would chose option 1.

suzmis84

Thanks for the replies. Mortgage will be for £384K (i.e. house purchased for £480K), and once I factor in costs then the fixed rate is essentially 4% (as opposed to 3.79%).

I am tending towards taking the tracker for now and then fixing later this year sometime - there is no cost in the delay and I doubt rates will be raised this year given the current situation in Europe. Although fixed rates may be higher, I could be in a poisition in 6-months to put down more equity to get a higher LTV and hence fixed on a better rate.

dimbo61

OMG that is a big mortgage and each 1/2% rise in rates are going to cost you but you have already worked out that the fix is 1% more expensive taking into account the fees.
If you can overpay ( are you allowed unlimited overpayments? ) then try and get the LTV below 75% where better deals are available.
If the tracker is a lifetime tracker then you may well stay on that longer than you think Good Luck

Pee

I would choose the tracker. This is partly an illogical hatred of paying fees and a liking for the flexibility that offers to redeem early.

I am saying that because at the moment I don't believe interest rates are going to go up much and if they did, I would still be able to pay the mortgage. If you had asked me two years into my mortgage, I'd have gone for the fixed as I would have needed the security and had nothing to fall back on/ cut back on.