First Direct Capped Tracker Mortgage

grumble_100

Hi,
For just over two years I have had an offset mortgage with First Direct which is a variable rate (2.48% above bank of england base=2.98% for the term of the mortgage). This is also capped at 4.99% until 31st August 2012.

I have today been notified that First Direct are offering a three year capped tracker offset. This trackes the B of E base rate plus 2.28%(so currently 2.78%). This is capped to 4.28%. However the rate and cap are only until 31st December 2014.

There are no booking fees for existing members but not sure if there would be any other fees.There wil also be early repayment charges with the new mortgage but none with my current one.
This would be a reduction of 0.2% on my current payments.
The one downside is that my current mortgage rate is for the term whereas this one is only for three years (although I suppose i could look for a new deal then).

My current Mortgage is around £77k which I aim to pay off in around 10-11 years.
Any views on whether it would be worthwhile going with this new deal.

poppy10_2

Doesn't really seem worth it to me

Peelerfart

Got to agree with poppy,doesn't seem worth it to me either

grumble_100

I appreciate any input but can I ask why not if I would be saving 0.2% interest.
Is it because this is so negligible or for any other reason. I have phoned FD and they have confirmed there are no fees whatsover.

I am gratefulfor any views and thanks.

poppy10_2

You gain 0.2%, but lose the lifetime tracker, and tie yourself into an ERC, which will be a pain if your circumstances change within the next three years and you need to move home/remortgage

grumble_100

poppy10 wrote: »

You gain 0.2%, but lose the lifetime tracker, and tie yourself into an ERC, which will be a pain if your circumstances change within the next three years and you need to move home/remortgage

Thanks. I'm pretty confident that my circumstances won't change in the next three years but see what you mean about the full term tracker. I was thinking maybe I could get a simmilar deal at the end of the three years but I take it you are suggesting that my current full term tracker is something worth holding on to that may not neccessarily be so easy to come by in the future?

dimbo61

You might end up staying on your current deal for the rest of the mortgage term ! however long that maybe.
If you take the new deal you will then be looking for another deal in 3 years when rates may have gone up big time

grumble_100

Guys,
I've been looking at Mortgages again today and was wondering if it would be worthwhile me transfering to the HSBC lifetime tracker special.This is tracker at 1.99% plus B of E for lifetime (sorry I am not allowed topost links cos I'm new)



I quite like my First Direct offset account but this HSBC lifetime tracker is 0.5% cheaper. It says no fees but would there have to be solicitors fees and valuation to change lender?

Grateful for any advice

originalmiscellany

That would be slightly better - again 1.99 + 0.5 = 2.49%. Are there any costs associated with the HSBC one? If not, and if it's for the lifetime it could be better - but with offset you can/do have the ability to make a huge saving if you can overpay regularly, somethin you've admitted may be lost with the HSBC one?

grumble_100

There don't appear to be any costs associated with the HSBC mortgage. I would have to pay a closure fee of £129 to FD. I believe you can overpay with the HSBC mortgage. The main thing I would lose would be offsetting my salary every month( whilst it lasts!!) and coupleof hundred pounds savings.

Thrugelmir

grother1 wrote: »

but I take it you are suggesting that my current full term tracker is something worth holding on to that may not neccessarily be so easy to come by in the future?

Always look at the follow on rate once the initial product term ends.

Rates are set to be intentionally attractive and eye catching. The sting comes in the tail.