Tracker mortgages when the base rate rises

Thrugelmir

aroominyork wrote: »

So if trackers are now around base + 1.49%, what were they typically when the base rate was 4%-5% between say 2004-2008?

Different era. Mortgage rates aren't simply based on BOE base rate. Other factors need to be considered.

getmore4less

There is no connection between base rate and base rate tracker margins.

daveyjp

aroominyork wrote: »

So if trackers are now around base + 1.49%, what were they typically when the base rate was 4%-5% between say 2004-2008?

Less than 1% for a lifetime tracker fully flexible mortgage.

silvercar

aroominyork wrote: »

So if trackers are now around base + 1.49%, what were they typically when the base rate was 4%-5% between say 2004-2008?

I have base rate + 0.5%. Taken in 2006.

There were some mortgages that were fixed for 4 or 5 years followed by base rate - something small. Taken out when the base rate was higher and people were laughing when they came out of their fix and rates had dropped to 0.5%.

Not normal times.

silvercar

Found it.

Article from a year ago:

http://www.thisismoney.co.uk/money/news/article-2572183/Five-years-0-5-rates-What-meant-borrowers-savers.html

The juicy bit:

The collective madness in the mortgage market during the property boom even saw some tracker deals offered at below the base rate, writes Simon Lambert.

In December 2008, when the base rate still stood at 2 per cent, I asked whether lucky borrowers with a C&G two-year tracker at base rate minus 1.01 per cent had the cheapest mortgage ever.

By the time base rate hit 0.5 per cent in March, those borrowers had a theoretical rate of -0.51 per cent.

The existence of a number of these below base rate trackers that went to sub-zero raised the question of whether lenders would have to start paying out interest to borrowers on the mortgages. They didn't but the lucky borrowers did end up effectively with 0 per cent mortgages. [Some charged a nominal 0.01%]

The real winners though were borrowers who took lifetime base rate trackers. These could not be had below base rate but did track very closely to it.

Comments in the article posted above included Woolwich customers with lifetime trackers at base rate plus 0.17 per cent. They could have been paying just 0.67 per cent on their mortgage for the past five years.

Thrugelmir

I have base plus 0.35% that was taken out in July 2007.

Best life time rate my lender now offers is base plus 2.39%. With a floor of 2.89%. Appears lessons have been learnt.

marathonic

Thrugelmir wrote: »

Best lifetime tracker rate is now 1.99%. That's with a 60% LTV and a £999 fee. (2.49% without a fee).

Jam today isn't always as appealing as it seems.

The best rate is actually 1.79% with a £950 fee with First Direct.

There is no fee for this product for existing mortgage customers. I recently remortgaged to their higher rate, fee-free, tracker and, upon completion, immediately switched to the 1.79% rate - so, effectively, I'm on a BOE Base + 1.29% lifetime tracker with no fees.

DreamerFTB

marathonic wrote: »

I recently remortgaged to their higher rate, fee-free, tracker and, upon completion, immediately switched to the 1.79% rate - so, effectively, I'm on a BOE Base + 1.29% lifetime tracker with no fees.

Other than the fee, that you avoided, what other expenses did you have when you remortgaged from fee free to +1.29%?

marathonic

DreamerFTB wrote: »

Other than the fee, that you avoided, what other expenses did you have when you remortgaged from fee free to +1.29%?

Just the mortgage closure fee of £125 from my previous lender.

bigheadxx

Best deal I have seen is Santander lifetime tracker at 2.39%. Fee is £495 for account holders plus you get cash back on mortgage payments which reduces effective rate for me to bbr plus 1.6%. 75% LTV better than most.