Fixed vs Tracker - whats the current trend?

bargain_hunter25

Hi all

I have 3.99% fixed rate mortgage coming to an end on 28/11/2012 so I am looking to re-mortgage.

I have been attempting to weigh up the benefits of Fixed Vs Tracker.

I have seen a Nationwide 4 year Fixed for 3.79% 80% LTV but then I have seen a Lifetime Tracker with HSBC for 3.29% 80% LTV. Both of these seem like great deals in their own respect. The Tracker has no early repayment fees or exit fees so you can jump ship if you wish at any point.

From reading the link below, I am now favoring the Tracker over the Fixed as it appears (from the experts) that a rate cut is more likely that a rate rise and it wont be until 2017 before things start to increase. This would mean a good 5 years on the Lifetime Tracker or even longer before it equals the 3.79% Nationwide rate which obviously means that if I fixed on the 4 year Nationwide deal I would pay way more (if this articles predictions come true that is)

Is a Lifetime Tracker at this time generally a more recommended thing to do, especially if it has no exit fees etc?

I think I may have to get my brain into maths mode and do some number crunching and some "what ifs".

I am sure other people will find the link interesting if not already seen

Link: http://www.thisismoney.co.uk/money/news/article-1607881/Interest-rates-News-predictions.html

Thrugelmir

First question is what does your existing mortgage product revert to in terms of SVR?

Remortgaging can cost a lot of money. So constantly switching lenders isn't always beneficial or cost effective. More so as the balance owed reduces.

bargain_hunter25

It reverts to 4.74% in December so i think its worth a swap.

My main concern is that for the application of an 80% deal, I am relying on my purchase price 2 years ago to still hold true as if it doesn't I wont qualify for 80% LTV. As I am from the North West its most likely gone down a bit if I look at the stats.

I am wondering if HSBC for example would offer me an alternative in that case without having to pay another booking fee / valuation fee?

GMS

This is a very personal choice and depends on your attitude to risk. Follwing a trend may be fine for a pair of shoes but when it comes gto a mortgage it is not something to be followed.

If you are happy to take a chance on rates changing and fully understand the risk then a tracker may well be your choice. There is always the option of overpaying up to the amount the fixed would have been (assuming product allows) which will further take advantage of the low rate.

If there is a concern that rates rising would impact you then consider the fixed.

Do not assume that if rates rise you can simply change to a fixed rate. May well be able to but there could be costs involved and the big thing is the rates of today may not be available at the time.

If you decide to go for the tracker then you need to get the thought of a fixed rate of today out of your mind. Probably not going to be your plan b.

bargain_hunter25

I think I would most likely go for the Lifetime tracker.

Can anyone advise on my earlier question from their own experience?

"My main concern is that for the application of an 80% deal, I am relying on my purchase price 2 years ago to still hold true as if it doesn't I wont qualify for 80% LTV. As I am from the North West its most likely gone down a bit if I look at the stats.

I am wondering if HSBC for example would offer me an alternative in that case (the 85% version etc) without having to pay another booking fee / valuation fee?"