Jumping from a 2 year fixed to a tracker?

dreavi

Heya all,

Was hoping that your kind selves could point out any flaws in my plan that I haven't considered.

Basically we are coming to the end of our first mortgage deal, 2 year fixed paying 1365 a month. We've been making Max overpayments so we've got equity up from 13% to 35% (including house value increase)

Anyhoo looking at a new deal of a two year Tracker with Nationwide which means we pay £1070 a month. Now I know that means if the rates rise then so to will our payments. However seeing as Nationwide have to give us a months notice of an increase and there is no fee to exit the deal, am I correct in saying that we can stick with the tracker and just jump to a 2-3 year fixed if rates look like increasing? I assume we'll lose some in the deal switch but it seems unlikely interest rates will jump up in a massive leap anytime soon (famous last words)

I like the Tracker as it less money which means we can throw the extra at the overpayments and still jump ship if needed.

Is there some obvious flaw here that I'm missing or is my logic sound?

Many thanks,

D

laurasavon

If there's no penalty for leaving then yes you could move, but if rates rise the cost of a fixed product would more than likely rise also.

Don't forget there may also be product fees and if you move to another lender there may be valuation / solicitor costs as well.

Thrugelmir

If interest rates change. Mortgage products will change rates overnight potentially.