Move off lifetime tracker for 2/3 yr at better rate?

MDHT486

Hi,

We're moving down the LTV ladder and have the option of applying for tracker mortgages where the rate is c0.75% better than the 2.59% lifetime tracker that we currently have.

Switching to a more competitive rate will allow us to reduce the overall length of mortgage by 4 years while paying roughly what we do now. We've recently jumped in terms of capital owed so the attraction is to get take as big a chunk from that as possible over the next 2/3 years.

I may be able to renegotiate with our existing lenders to bring the lifetime tracker down to 2.19% (versus the 2/3 year trackers at c1.79%).

I like the idea of the lifetime tracker as there are no new product fees to pay but the lure of paying down the capital really appeals.

Maelwys

MDHT486 wrote: »

Hi,

We're moving down the LTV ladder and have the option of applying for tracker mortgages where the rate is c0.75% better than the 2.59% lifetime tracker that we currently have.

Switching to a more competitive rate will allow us to reduce the overall length of mortgage by 4 years while paying roughly what we do now. We've recently jumped in terms of capital owed so the attraction is to get take as big a chunk from that as possible over the next 2/3 years.

I may be able to renegotiate with our existing lenders to bring the lifetime tracker down to 2.19% (versus the 2/3 year trackers at c1.79%).

I like the idea of the lifetime tracker as there are no new product fees to pay but the lure of paying down the capital really appeals.

The simplest way to look at it would be to compare the standard minimum monthly repayments you'd be paying under both schemes, for the duration of the discounted term. Work out the amount you save over that period and then deduct the "switching fees".

It shouldn't really matter too much in terms of being locked in - in 2/3 years time when the discount term ends you can always swap to another deal. Whilst technically possible, it's rather unlikely that your current higher-LTV lifetime tracker rate would beat lower-LTV short-term discount rates in 2/3 years time. Especially if swapping means you also manage to reduce the capital.

What's the tracker jump to after the discounted term ends? Are there any similar fixed deals that might/would work out better?