Is this a decent mortgage rate?

Abatement

I've been offered a tracker-to-fixed mortgage with the rates below, for a £1995 fee. The amount borrowed will be in the region of 330,000, with a 25% deposit.

Year 1: BR + 1.79%
2: BT + 1.79%
3: Fixed 3.49%
4: Fixed 3.49%
5: Fixed 3.49%

Can I do better? I've looked around, spoken to L&C, and can't find anything better.

Abatement

anybody...?

I should have mentioned, the tracker-to-fixed thing isn't a particular requirement; it just seemed to be the best deal around. But in principle we'd be happy with a fix or a tracker.

dimbo61

YBS have a 5 year fix at 3.39% fee £995 fixed until 30-06-2017 so over 5 years.
Tough lending so need top credit score, LTV, income etc
Will the BOE base rate rise above 1.5% in the next 2 years ?????
Has been 0.5% for 3 years now so how much longer is the big question.
I am a YBS customer and love offset mortgages
Beware that the SVR is 4.99% at the moment

getmore4less

I think you need to think beyond 5 years.

Whats the follow on rate.

Whats the largest payment you could afford.

Back up plan for loss of income.


Lower rate now gives a chance to reduce debt ar the risk of rates running ahead of a good fix.

either way the longer term is the key, a good tracker might turn out to be cheaperthan the alternative offer available in 5 years or the folloon rate if a remortgage becomes an issue.

Whats the best tracker you could get, I would benchmark that against the deal you have but longerthan the 5 years so the folloeon rate is important.

Abatement

getmore4less wrote: »

I think you need to think beyond 5 years.

Whats the follow on rate.

Whats the largest payment you could afford.

Back up plan for loss of income.


Lower rate now gives a chance to reduce debt ar the risk of rates running ahead of a good fix.

either way the longer term is the key, a good tracker might turn out to be cheaperthan the alternative offer available in 5 years or the folloon rate if a remortgage becomes an issue.

Whats the best tracker you could get, I would benchmark that against the deal you have but longerthan the 5 years so the folloeon rate is important.

Most lifetime trackers that I can see (I think that's what you're referring to) are at higher rates than BR+1.79% so would be worse for the first two years. A couple come in under 3.49% so would be better than the fixed bit of my deal for the last three years, but only if base rate stays at 0.5%. On the whole I can't see that it's very likely I'd be much better off.

The follow-on rate is the lender's SVRm, which isn't the best. But I'd look to remortgage after 5 years anyway, so that shouldn't be an issue.

getmore4less

Abatement wrote: »

But I'd look to remortgage after 5 years anyway, so that shouldn't be an issue.

You need a plan if it is an issue.

Abatement

Yes, but what sort of plan can I make? Picking a higher rate over the next 5 years just because it has a smaller SVR in year 6 would seem a bit over-cautious, surely?

Gary123456790

I think he means that when it comes to remortgaging in 5 years time if the best rate you could find was 2% higher would this be a big issue for you, i.e. do you have a plan to cover a big increase in you payment in 5 years?

Its more of an issue for you as the mortgage size is bigger, so each % increase in rate makes a bigger impact.

Gary.

Abatement

Yes, we would still be able to pay the mortgage in that situation, assuming that we haven't both lost our jobs or somethign disastrous.