Fixed rate or tracker

pink_petal

hi

Just looking for some opinions! Our current mortgage deal runs out at the end of March so we've started looking around at our options. RBS (current lender) sent us some info with a link to some options...but all the options are fixed rate, we wanted to look at some trackers for comparison but it just says 'call into a branch'...any one know why this is?

We are 90% sure we'll move in two years time so we are looking at a 2 year deal. The interest rate on their fixed rate is 2.5% (with product fee) or 2.98% without the fee.

I know we can't predict what interest rates are going to do but does this seem ok, or would we be crazy not to go for a tracker when rates are so low? We've worked out that we could still afford repayments if the interest rates went up (unless they stated going crazy, but that's not likely!)

Just so torn between taking the risk or going for the security of a fixed rate!!!

Opinions?

PP x

Grenage

For a two year period, I would probably get variable mortgage. The chances of there being more than a minor rise in that period seems unlikely.

I am not a financial expert, but that's my opinion.

RavingMad

We've just switched from a tracker (2.39%) to a 2 yr fix (1.74%) My reasoning being that I don't think rates will move by much in that time.

However, I was on 3 different tracker rates prior to this fix as my LTV improved and I took advantage of better products, all with HSBC. Something to consider?

pink_petal

Thanks for the replies! My brother works for a bank (but commercial, not mortgages) and I had a chat with him last night and he was of the same opinion that we should at least look at a tracker.

Husband is going to phone today and see if they'll give us some info for comparison over the phone as we can't get into a branch since we're at work then we can spend some time at the weekend working out what would work best!

Thanks again
PP x

MacMickster

If you're planning to move in 2 years time do you want to restrict yourself to waiting the full 2 years?

If you tie yourself into a fixed rate you would be faced with early redemption penalties if you came across the perfect house for sale in 18 months?

Given your circumstances I would certainly be leaning towards a tracker mortgage.