Should I go for Tracker or Discount?

cymro

A&L have offered me either:

2 Year Base Rate Tracker (Fully Flexible) 4.99% with £849 admin fee
OR
2 Year Base Rate Tracker Fee Saver (Fully Flexible) 5.49% with £250 admin fee
OR
2 Year Discount (Fully Flexible) 1.85% for 2 years (Their SVR is currently 7.39%) so initial rate comes out at 5.54% with no admin fee

Tracker or discount? - I am guessing that interest rates are not going to go 'much' higher and over the 2 years are more likely to come down but who knows.

The current payment difference between 1st and 3rd option is only £10.

Anyone like to suggest the best option?

Many Thanks

Rick62

If there is not much in it i would always chose a Tracker over a Discount because if the bank base rate changes the Tracker rate will change almost immediately by the same amount, whereas with a lenders Discount they may raise their rate by more than the bank increase, or reduce it by less, or not reduce it for 2 months etc etc.

From a quick calulation the 4.99% with higher fee works out better value if your mortgage is over about £60,000 (0.5% difference in rate x £60,000 = £300 by 2 years = £600 = difference in fees.

cymro

Thanks Rick62 - My mortgage is 55K - so I may plunge for option 2