Fixed rate mortgage - rate after fixed period - does it matter?

powerbarge

Hello everyone,

Does the rate after the fixed rate period (variable rate) really matter?

For example, if Bank A is offering 3% fixed for 5 years with the variable rate at 5% and Bank B is offering 3.5% fixed for 5 years with the variable rate at 4% it's still better to go for Bank A's offering right?

It seems that most people will change product at the end of a fixed rate period anyway?

Thanks for any advice

kingstreet

What happens if your circumstances change and you can't remortgage at the end of the fix and your current lender has no decent customer retention products?

You're stuck on that follow-on rate.

I have a client who recently rejected an Accord product with a 5.99% follow-on rate, just in case he had such a situation arise. He chose a slightly higher rate from Nationwide as it;-

- has a 3.99% standard variable rate to follow-on

- is committed to offering good products to existing borrowers, not just new ones.

Why make the first couple of years of a thirty-year mortgage life so much more important than the rest?