Mortgage Help!

Distinction

Hi people! Some help greatly needed.

I'm a first time buyer.

Value of property is £350,000
Deposit amount is £100,000

So mortgage needed for £250,000

So the LTV is about 71%.

I want a term time of 15 years.

Would you suggest a fixed deal or tracker?

Thanks for your help.

Thrugelmir

[QUOTE=Distinction;47320599
Would you suggest a fixed deal or tracker?

[/QUOTE]

Is knowing what your monthly outgoing will be important to you?

Or what you prefer a lower interest rate (for an unknown period of time) and there the ability to overpay the mortgage ?

Distinction

Thanks for your quick reply.

Well ultimately it comes down which option would charge the lowest total interest after the 15 years.

kingstreet

Think that might be a slightly tall order for an internet forum. Even one populated by intelligent, professional and experienced advisers like this one.

Sorry. Wouldn't hazard a guess over 15 years.

GMS

Distinction wrote: »

Thanks for your quick reply.

Well ultimately it comes down which option would charge the lowest total interest after the 15 years.

Impossible to say. Any tracker could rise meaning interest repayable will rise too.

At the end of any fixed rate it would be dependant upon rates at that time.

If you want to take a chance on rates staying low then go for a tracker. If you have any concerns about repayments rising then consider a fix.

MFSaver

Distinction wrote: »

Thanks for your quick reply.

Well ultimately it comes down which option would charge the lowest total interest after the 15 years.

I am afraid that this is akin to looking into a crystal ball, because the majority of the population will not know when/if/by how much rates will go up.

If you have the ability to overpay on a regular basis right away, a tracker might be the way to go in the meantime since you can get very good rates right now. Since trackers generally have no ERC, you can move to a fixed mortgage if rates start to climb.

YBS does a 75% LTV mortgage at 1.79% + BoE base rate for 2 years and fixed at 3.39% for the next three years. This might suit your needs since you can take advantage of low rates in the short term but still have a reasonable fixed rate in 2 years if rates go up.

At the end of the day, it is a gamble when choosing between fixed and tracker.

Distinction

Well I can pay around £2000 a month comfortably.

I can only see the BoE base rate going up after a couple of years. I doubt it will go down to 0.25% for example.

Nationwide has a five year fix at 3.94% - do you think this is a worthwhile pick?

Thrugelmir

Distinction wrote: »

Well ultimately it comes down which option would charge the lowest total interest after the 15 years.

Take the lowest interest rate you can obtain at any point in time and overpay by the maximum you can afford.

The total amount of interest charged over 15 years will depend on the amount borrowed (every month).

There are no guaranteed options from selecting any particular mortgage product. Interest rates will be determined by market forces.

MFSaver

Distinction wrote: »

Well I can pay around £2000 a month comfortably.

I can only see the BoE base rate going up after a couple of years. I doubt it will go down to 0.25% for example.

Nationwide has a five year fix at 3.94% - do you think this is a worthwhile pick?

My above post describes a YBS mortgage that has a better rate than the Nationwide one. If you want the security of a long term fix, I suggest looking at YBS's or Chelsea Building Society's fixed mortgages, which have much better rates than the one you quoted.

Distinction

YBS looks good- just asked them to call me back.

I could just pay the maximum allowable for the first two years and then make the minimum (or max if possible) payments there after. This should reduce the loan time.

Wh05apk

Fixed or tracker aside, I would try to get your LTV under 70% as you will find rates may then be quite a bit lower.