Lifetime Trackers

Distinction

Are they worth it?

pinkteapot

Somewhat open-ended question!

The key benefit (usually - check the T&Cs of the particular product you are looking at) is the fact that there is no 2, 3 or 5 year introductory rate. 2, 3, 5 year mortgages usually have an early repayment penalty and a limit on overpayments during that initial period. With lifetime trackers you can normally make unlimited overpayments from the start. And if you want to move to a different mortgage (or pay it off) there's no early repayment charge of thousands.

We took out a lifetime tracker last August and have so far overpaid by around £30k, making the most of the base rate being so low at the moment. On a 2,3,5 year product limited to overpayments of 10% of the normal repayment, we would only have been allowed to overpay by £799! Our overpayments to date have knocked almost £7,500 off the interest we will pay over the life of the mortgage. Happy days.

Tracker mortgages in general tend to be a good deal at the moment because the base rate is so low. If your monthly budget is tight and you will struggle to make higher repayments when the base rate goes up, it might be better to go for a fixed rate.

Beyond that, hard to advise without knowing more detail...

Thrugelmir

Distinction wrote: »

Are they worth it?

Compared to?

Distinction

I was just trying to compare whether to go for a lifetime tracker or just go for a three year tracker and then change.

Distinction

pinkteapot wrote: »

Somewhat open-ended question!

The key benefit (usually - check the T&Cs of the particular product you are looking at) is the fact that there is no 2, 3 or 5 year introductory rate. 2, 3, 5 year mortgages usually have an early repayment penalty and a limit on overpayments during that initial period. With lifetime trackers you can normally make unlimited overpayments from the start. And if you want to move to a different mortgage (or pay it off) there's no early repayment charge of thousands.

We took out a lifetime tracker last August and have so far overpaid by around £30k, making the most of the base rate being so low at the moment. On a 2,3,5 year product limited to overpayments of 10% of the normal repayment, we would only have been allowed to overpay by £799! Our overpayments to date have knocked almost £7,500 off the interest we will pay over the life of the mortgage. Happy days.

Tracker mortgages in general tend to be a good deal at the moment because the base rate is so low. If your monthly budget is tight and you will struggle to make higher repayments when the base rate goes up, it might be better to go for a fixed rate.

Beyond that, hard to advise without knowing more detail...

15 years in my loan term time. Loan of £200000.

MFSaver

Distinction wrote: »

I was just trying to compare whether to go for a lifetime tracker or just go for a three year tracker and then change.

They are worth it if interest rates don't increase until you pay off your mortgage. You will have to look into a crystal ball to see if interest rates will stay the same for 15 years.

dimbo61

If you take the right life time tracker you may not need to remortgage again.
If you take a 3 year deal what will be the rate in 3 years SVR ? hence paying more in fees, searches,legals etc to move and rates maybe much higher
So its anyones guess
How about a 5/10 year fix !! so you know what you are paying or an offset mortgage

hillcats

dimbo61 wrote: »

If you take the right life time tracker you may not need to remortgage again.

Exactly the position we are in, never likely to change...

dimbo61

BOE rate still at 0.5% for 31 months and you on a tracker of 0.62% above base GREAT DEAL well done
BUT ! should you be putting money into cash ISA,s and regular savers paying more after tax ?

Mrs_Z

yes when the interest rates are low!

bclark

We took out a lifetime tracker just over 5 years ago for 0.18% above base rate (although it later transpired there was a 2% collar). Obviously for us it has proved worth it as we have been paying 2.18% for quite a long time now.

We aren’t tied into it for life either, we were tied in for 4 years, but now we could switch at any time we like. The reason that we decided on that at the time is that we didn’t want to keep remortgaging and paying our arrangement fees.