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us libor tracker
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riverdale
Posts: 6 Forumite
I am about to change my mortgage after a 5 yr fixed rate. What do people think of the tracker mortgages linked to the US Libor? They look a good deal to me!
RD
RD
A shadowy flight into the dangerous world of a man who does not exist.
A young loner on a crusade to champion the cause of the innocent,
the helpless, the powerless, in a world of criminals who operate above the law.
A young loner on a crusade to champion the cause of the innocent,
the helpless, the powerless, in a world of criminals who operate above the law.
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Comments
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The look good but
1) there is the risk that US rates might move against you. Are you confident that US rates will stay below UK rates by 2% or more?
2) If it does go wrong then there are no repayments allowed, a long tie in a high redemption penalties so there's no way out.
OK, if youa re happy with the risk.
One idea is to combine with a UK tracker.
e.g. get half your mortgage on US and half on UK.
You will then be hedgin your bets and can arrange the UK bit so that you can make overpayments.
A possible compromise.0 -
This is groundhog day isn't it!0
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I am considering the Stateside Tracker with Skipton BS at 3.19% Variable at 1.74%above the dollar over 7 years. (which is what I've got left on curent mortgage term.) After discussing with lender I was informed that although I cant make overpayments as part of the mortgage I can, if I wish, reduce the term of the mortgage in the future thus increasing my payments and have the same effect as overpaying. Does this sound ok???????? It seems too good to be true.0
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Does this sound ok?? It seems too good to be true.
If US rates stay lower than UK rates then it will be fine.
If US rates rise relative to UK rates then you could find you are paying more.
That the gamble you are taking.
What analysis have you done with respect to the movement of US rates so far?0 -
Halifax have got a 2yr tracker currently 5.2%. I suppose I will go for that and play it reasonably safe.A shadowy flight into the dangerous world of a man who does not exist.
A young loner on a crusade to champion the cause of the innocent,
the helpless, the powerless, in a world of criminals who operate above the law.0 -
You might find nationwide have a better deal.
I think they have a 2 year tracker at 4.79% if you have the right LTV.0 -
[/What analysis have you done with respect to the movement of US rates so far? ]
Not started any analysis yet, only started considering switch today. Can you suggest an appropriate point of reference to help?? The only site I have looked at so far is asking for payment for archives of US rates.0 -
Try seaching this site someone might have posted something on it before.
You might also find something on one of the boards at Motley Fool (https://www.fool.co.uk).
Also try google (https://www.google.co.uk).
I haven't researched it myself but would want to look at past performance to see what the chances were of it staying 2% below Uk rates.
I don't think there is much question that US rates will stay below UK rates, but you also have to cater for the 2% as well and I couldn't be too sure about that without checking it out.0 -
Found some more info on the Skipton site.
http://www.skipton.co.uk/mortgages/products/stateside_tracker/index.asp
I think you can see from this graph that over the past 2 years the US rate has been some way below the UK one, but it has certainly not been consistently 2% below and there was a short period when it was above the UK base rate, so there certainly is a chance that over the 7 years you could at some point be worse off on this rate.
Depends on whether you want to go gambling with your home really.
The sensible thing to do is to only gamble with money you can afford to lose.0
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