Rate switch - which product to select?

Coppice

Hi all,

I'm currently on Barclays Lifetime tracker 3.79% and eligible to switch without ERC on Jan 1st. Remaining mortgage is £120k, Barclays mortgage advisor provided online valuation of £185,500, 65% LTV. 23 years left on the term.

Currently looking at:

2 yr fix at 2.89%, no fee
2 yr tracker at 1.49%, £999 fee
5 yr fix at 2.99%, £999 fee

I overpay by £400 per month.

First thoughts were to fix for 5 years, however I'm now leaning towards the 2.89% and re-assessing in 2 years with a 60% LTV. Tracker would be marginally cheaper over the initial period if the BBBR stays at 0.5%.

Is it a sensible plan to lock in for 2 years, overpay the saved fees and then re-assess whether to remortgage after this one? I like the idea of tip-toeing. If BBR reaches 1.5-2% by start of 2017, market leading mortgages should be around 3% -- is that assumption a mistake?

Thanks,

Tom

amnblog

You cannot assume anything about future rates -anything could happen.

dimbo61

ARE YOU STAYING IN THE PROPERTY long term?
Over 5 years? 5 year fix at under 3% !!!!
You can still overpay by £400 a month.
Guess you are paying more than 2.99% now?

GoneWithTheWindFabulous

I have just fixed for 4 years at 3.44% No fee (only had 4 years I wanted 5)

The only thing with your 2.99% for 5 years is the fee. Have you worked out how much you would save even with a fee?

I really considered 2 years but actually 4 years gives me a good enough time to overpay

Just think win win with whatever you do as you will be paying less than you are now. Also maybe if rates rise in 2 years and even though your LTV could be 60% you will not get the same percentage deal anyway.