Tracker or Fixed question (sorry!)

uk_messer

Hi All,

I've tried reading up on this and even on previous threads but I just wanted to clarify.

From what I can tell a fixed rate mortgage means the rate will be fixed for that term (2 years etc) regardless of the base rate changing?

A tracker with a 2 year term will vary with the Bank of England base rate but the additonal rate placed on by the lender will be the same for the 2 year term?

After the fixed terms on either type of mortgage - they will both be the same?

I'm looking at two mortgages from the same lender. Both have the same LTV. One is fixed 2 years at 4.45% and the other is a tracker (2 yr term) at 4.05%. The tracker also has lower applications fees
Working on the basis that the base rate won't increase for 2 years, the tracker is the better deal, right?

beecher2

If you work on that basis, then yes. However, no-one knows for sure what will happen to base rates. It may be worth looking at deals which last longer.

Note that terms aren't always 2 years - they'll have a definite date which they come to an end so might be 1 year 10 months, might be 2 years 2 months.