Mortgage help : HSBC Lifetime tracker 1.49% + Base Rate or a short term fixed deal ?

wizard101

Whats better for a £100,000 mortgage debt with 60% LTV .

HSBC lifetime tracker at 1.49% + Base rate = 1.99%
and has a £725 set up fee.

or

2 Year fixed deal at around 1.74% no fees.

?

Thrugelmir

Over the next 2 years the fix.

Apples and pears so to speak. You need to consider the remaining term of the mortgage when making a decision. Not just short term interest rates.

wizard101

Its a new mortgage so will be 25 year term.

Don't know whether to go lifetime tracker and save with the switching , exit fees etc. Or do the fixed deals but what if after the 2 year fixed deal there isn't as good a rate as what that lifetime tracker would have been.

Thrugelmir

As your mortgage balance reduces then the cost of remortgaging to another lender, makes moving less and less likely to be economic. What's the follow rate for the 2 year fix.

1.49% over base is a competitive rate even on a historical basis. Unlikely you'll better this in the future for a tracker rate.

wizard101

If you go for the 2 year fixed deals which has 0 set up fees and only cost around £60 exit fee, then shouldn't be an issue to move around much should it ?

When the fix comes to an end, could just keep remortgaging to the lowest 2 year fix without any fees and just pay the £60-80 exit fee?

The 2 year fix goes to 3.99% snr after so would want to move prob.