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Fully Fix or Partial Fix?
Options
cwcw
Posts: 928 Forumite
We are about to apply for a new mortgage to buy a new house. We have a portable mortgage with HSBC which is a lifetime tracker at +1.24%, so pretty good rate right now. This would make up around half of the new total mortgage, and the 2 options I am considering are:
1) Port the tracker and take the additional new half of the mortgage out with HSBC's 5 year fix at 4.29%
2) Forget the tracker and quit while ahead, and start a whole new mortgage with Britannia at 4.19% fixed for 5 years
We want to move fast so HSBC's conveyancing delays (and extra costs) need bearing in mind to an extent.
I've done some calculations (and they're not perfect, there are so many variables) and allowing for monthly payment differences, differences in fees, and differences in capital repayments, over the course of 5 years we would need the base rate to average 3% to break even (i.e. the total remaining mortgage +/- fees +/- differences in payments comes to around £0).
If the base rate remained at 0.5% for 5 years (worse case scenario and not too likely but who knows?) we'd be about £11,000 worse off. If it average 2% over 5 years we'd be around £4,600 worse off. Anything over 3% on average and we're better off. Also, what price stability, with plans to start a family?
1) Port the tracker and take the additional new half of the mortgage out with HSBC's 5 year fix at 4.29%
2) Forget the tracker and quit while ahead, and start a whole new mortgage with Britannia at 4.19% fixed for 5 years
We want to move fast so HSBC's conveyancing delays (and extra costs) need bearing in mind to an extent.
I've done some calculations (and they're not perfect, there are so many variables) and allowing for monthly payment differences, differences in fees, and differences in capital repayments, over the course of 5 years we would need the base rate to average 3% to break even (i.e. the total remaining mortgage +/- fees +/- differences in payments comes to around £0).
If the base rate remained at 0.5% for 5 years (worse case scenario and not too likely but who knows?) we'd be about £11,000 worse off. If it average 2% over 5 years we'd be around £4,600 worse off. Anything over 3% on average and we're better off. Also, what price stability, with plans to start a family?
To fix or not to fix - 5 year period? 4 votes
1) Port the tracker and fix the remainder?
50%
2 votes
2) Fix the full amount for 5 years?
50%
2 votes
0
Comments
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Well this thread bombed. Knew I should've used my girly alias name instead, never fails to get loads of replies :rotfl:0
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