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What would you do?
Paton147
Posts: 61 Forumite
We owe 135k on a 205k property with a term of 29 years. We are in our early 30s and looking to move to something around 250-275k in 2019/2020.
Our current mortgage is with the TSB.
70k @ 1.73% (1.23% above BoE full term)
65k @ 2.14% (fixed till Aug 18).
I’ve always said I’d keep the tracker as long as I could, but fixed rates became comparable to it in recent years given the prolonged low BoE base rate.
At the moment, TSB offer 1.69% for our LTV. So providing that rate remains available this summer, would you just fix the whole mortgage at that rate thus deleting the historic tracker?
Would you overpay? Or just save to facilitate the house move and reduce the borrowing you need for a more expensive place in a couple of years time?
Our current mortgage is with the TSB.
70k @ 1.73% (1.23% above BoE full term)
65k @ 2.14% (fixed till Aug 18).
I’ve always said I’d keep the tracker as long as I could, but fixed rates became comparable to it in recent years given the prolonged low BoE base rate.
At the moment, TSB offer 1.69% for our LTV. So providing that rate remains available this summer, would you just fix the whole mortgage at that rate thus deleting the historic tracker?
Would you overpay? Or just save to facilitate the house move and reduce the borrowing you need for a more expensive place in a couple of years time?
0
Comments
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Why are you only considering TSB? Plenty of other lenders out there with cheaper rates.
It would make sense to look to remortgage both elements when your fixed rate expires in Aug 2018.I am a Mortgage Broker.
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice0 -
Historically 1.23% above base for life is a highly competetive rate. Not something which should be sacrificed cheaply.0
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Look ahead to the end of the fixed rate. Nobody knows what will happen to interest rates, so think about what YOU consider to be towards the worst case scenario. Forecast your situation.
- If you'd be OK on your base+1.23% rate, but would be in hot water if you had to pay the SVR, I'd keep the tracker.
- If you'd still be OK on the SVR, I'd get a fix - the savings are worth the risk.
- If you'd be in trouble with either, keep the tracker so you don't have a big ERC to pay if an interest rate spike forces you to sell
Re: overpaying, see my reply in https://forums.moneysavingexpert.com/discussion/5766703 - slightly different situation, but I still don't advocate overpaying unless your mortgage interest rate is above likely investment returns.0 -
....
move to something around 250-275k in 2019/2020
...
fixed till Aug 18
...
if re fixing Aug 18, shortest is 2 years you will be moving during the fix.
rate will be lower on the list than ERC/Porting/affordability considerations.0
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