Should I port my existing mortgage on lifetime tracker?

pootleflump

I have done very well on my mortgage deal which I took out in 2004; it is a lifetime tracker at 0.99 above BofE base rate, so for many years has been 1.24%.

I'm buying a new property and the plan was to pay off the mortgage remaining (31k) then take a mortgage of £225k at 1.29% fixed for 2 years.

However, as I'm remaining with the same company, I've been offered to port my current mortgage, keeping the lifetime tracker rate and make up the rest with 194k on the 1.29% fixed.

If I take the whole lot on the fixed, it will cost £877 per month. If I take the two mortgages, it will cost £1k per month (£757 for £194k and £247 for £31k).

Well done if you've got this far! My question is, although it will be more expensive initially, is it worth hanging onto that lifetime tracker rate? I've always been advised that I was very lucky to get such a deal.

Mortgage_Adviser

The only way for the base rate is up.
The rate difference between 1.29% fixed and 1.24% tracker is 0.04% so £6 per month.

Fo a sake of having £6 saving per month which will become a loss if the base rate goes up by another 0.25% any time soon is it worth the hassle?

The only reason why you may want consider porting is if you are expecting a windfall so so could use it to overpay the tracker mortgage/repay it in full without early repayment charges

pootleflump

Well, there are only 11 years remaining on the £31k mortgage so I suppose it would save me spreading that amount over 25 years again, thus paying lots more interest?

We have 2 endowments due to mature in 2024, worth about £60k in total, so we would pay that off then. My thinking was that in 2 years time when I come to switch my mortgage deal, the fixed rates will not be as good as now & my tracker might beat them, but I guess that's actually unlikely.

Edi81

Your maths are wrong.
For many years your tracker was a BOE of 0.5% plus 0.99% = 1.49%.

Interest rates weee only at 0.25% for just over 1 year following the brexit vote.

Keep your tracker. Yes rates have gone up and are expected to rise more but not to crazy levels.

dimbo61

Why are you thinking of a 2 year fix ?
Why not 3/4/5 ? £225,000 is for me a big mortgage !
Check if you can overpay ? Most allow 10% a year.
If you keep the tracker mortgage and take a new fix you can use the endowment money and overpay both parts of the mortgages.
Unless you plan to move in 2/3 years ?
Consider an offset mortgage I Love Them

pootleflump

Edi81 wrote: »

Your maths are wrong.
For many years your tracker was a BOE of 0.5% plus 0.99% = 1.49%.

Interest rates weee only at 0.25% for just over 1 year following the brexit vote.

Keep your tracker. Yes rates have gone up and are expected to rise more but not to crazy levels.

You're correct, it has been 1.49%, going down to 1.24% and now just gone back up to 1.49% again.

pootleflump

dimbo61 wrote: »

Why are you thinking of a 2 year fix ?
Why not 3/4/5 ? £225,000 is for me a big mortgage !
Check if you can overpay ? Most allow 10% a year.
If you keep the tracker mortgage and take a new fix you can use the endowment money and overpay both parts of the mortgages.
Unless you plan to move in 2/3 years ?
Consider an offset mortgage I Love Them

Yes, I can overpay 10%.

No plan to move. The 2 year fix is just because there was a big price difference between 2 yr and 5 yr fix, and I don't really have the need of knowing exactly how much I'll be paying for the next 5 years. I'm just hoping that rates won't have gone up too drastically in 2 years, then I can switch onto another deal.

pootleflump

dimbo61 wrote: »

Consider an offset mortgage I Love Them

I haven't got a clue about them! Very much the unknown, so I haven't looked at them.