Mortgage renewal

villa2010

Hi all,

Our Mortgage renewal is due up soon. We are currently on a fixed term Mortgage.

We would like to change to a tracker mortgage. Is this a risky think to do. I know its difficult to tell but are interest rates likely to increase or stay the same??

Is it possible to get tracker mortgages out there for two years or do they make you commit to them for 5 years ect.

Any advice would be greatly appreciated.

Many thanks.

harvey115

You can shop around for a good deal. Your existing lender may also have an attractive deal that you may like.

Tracker mortgage are available of course with a percentage added to it i.e. Bo£ Base rate + 2.49% etc. However it is up to you to find a good deal with as many years you like fixing.

I think you should contact your current lender at this point to see what deals you have access to and if you find something cheaper you can go for that. If you stay with your current lender the process of acquiring a new deal is called 'switching' and if you borrow from another lender it will be called re-mortgage.

Hope this helps.

villa2010

harvey115 wrote: »

You can shop around for a good deal. Your existing lender may also have an attractive deal that you may like.

Tracker mortgage are available of course with a percentage added to it i.e. Bo£ Base rate + 2.49% etc. However it is up to you to find a good deal with as many years you like fixing.

I think you should contact your current lender at this point to see what deals you have access to and if you find something cheaper you can go for that. If you stay with your current lender the process of acquiring a new deal is called 'switching' and if you borrow from another lender it will be called re-mortgage.

Hope this helps.

What are the current fixed rate deals at the moment?

Do you think IR will increase?

dunstonh

We would like to change to a tracker mortgage. Is this a risky think to do.

It is a higher risk option than a fixed rate. Whether or not the risk is justifiable at this time is hard to say. Only time will tell. You buy a fixed rate to give you certainty. Not to be on the best rate. Sometimes it will be the best. Sometimes not. Only time will tell.

grey_gym_sock

would you struggle if mortgage rates went up a lot? if you would, but you can get a new fixed rate deal which keeps your payments manageable, then perhaps a tracker is too risky.

on the other hand, if you could cope with much higher rates, then a tracker is still a risk, but you might choose to take it.

there are 2-year tracker deals. or longer ones but with no ERC after the first 2 years.

Jimbo1976

A tracker mortgage is a higher risk than a fixed rate but a lower risk than a dicounted mortgage (which is linked to a lenders SVR rather than the Bank of England Base Rate). A lot of lenders have recently increased their SVRs due to increases in their funding costs whereas the base rate has been old hold for 3.5 years and shows no sign of going up. I suspect we will see more SVR increases before the base rate goes up, especially if it goes pear shaped in Europe.

sterlingstash

First - check what rate your mortgage will move on to after the fix ends.... It may be better than the currently available trackers

villa2010

Say for example My mortgage repayments were £1000pm on a current fixed term Mortgage over 25 years.

Does any one roughly know How much less would I be playing if I switched to a tracker?

grey_gym_sock

well, that depends on what the fixed rate is ... but you can get rough monthly payments by putting figures (current mortgage balance, remaining term, tracker rate) into the MSE mortgage calculator.

then, to compare monthly payments, run the same calculation but with the rate changed to the follow-on rate you'll get if you do nothing (SVR).

and to see what happens if interest rates rise, also run it with a few higher figures, e.g. 8%.

villa2010

When InterEST rates go up. Do they usually go up slowly and if so by how much.

Do they not try and put them up gradually by 0.25% each quarter??!!

villa2010

I know its trickey to predict the future but what are peoples opinions on interest rates will the gradually increase over the next few years or will they stay the same.