Fixed Rate or Tracker?

Jo.G

We currently have a discounted tracker with Nationwide that expires at the end of October. I have the redemption figures at home and we will be going to see our usual Financial Advisor soon to change the mortgage, but we owe just over £104k. Also, last year we took out an addition £18k with the Nationwide but this wasnt on any product so that we wouldnt be tied in and can change both mortgages in October.
We took the discounted tracker as my OH said at the time, 'interest rates are only going to down, not up', and obviously thats not been the case!
I am thinking of getting a fixed rate, but I know my OH will want another product where there is a possibility that the payments may go down. And if the rates do go up, arent they only likely to go up another 1/4% and then are they likely to fall?
Just wanted to know what other people think?

Gorgeous_George

My guess is that we are at, or near, the peak. Accordingly, I am happy with my lifetime tracker.

If we are not at, or near, the peak, then mortgage rates will be the least of our problems.



GG

ashcarrot

I had the same qn, its all very much what to do. I reckon we're at the peak @ 6% but i dunno (and im also gonna be with nationwide)

toonfish

I agree with the above, my rate's up in November and I'll definitely be taking a tracker

MissScarlett_3

Yep, lifetime tracker for me too.

mountainchrisriver

Another one in the lifetime tracker camp here (with no fees and no ERC's aswell of course!)

phlash

Can I just point out that Interest rates set by the bank of england do not have to rise for the cost of borrowing to rise.

With all the uncertainty at the moment in the credit markets, it is a far fetched thing to call the top of the cost of borrowing. On the other hand, calling the top of the Bank of England's Interest rates may be a bit more credible.

It is quite possible we could have Interest rates at 6% and borrowing rates at 8%. The credit crunch news caused by the sub-prime markets in the US has a few more hidden secrets yet, I wouldn't get too comfy.

Gorgeous_George

phlash wrote: »

Can I just point out that Interest rates set by the bank of england do not have to rise for the cost of borrowing to rise.

Fair point. Hence, fix to Base Rate + n% with a lifetime tracker. Choose one with low exit fees and you can fix later if you wish.



GG

Gorgeous_George

I recommend getting your tracker quickly, if that's what you decide is best for you.

Northern Rock have announced (clicky) that they are withdrawing base rate trackers. I assume this is ALL base rate trackers and not just those aimed at the sub-prime market. My guess is that others may follow suit and introduce other forms of trackers. Perhaps 1% below SVR for example.

BBC_News_link wrote:

From 29 August, sub-prime home loans at the lender will cost up to 1.25% more. Loans that track the Bank of England's base rate will no longer be available.

GG

Gorgeous_George

Toot de toot de toot.

This is my trumpet.

GG

manikm

that was a year ago