Should we give up lifetime tracker?

amnblog

Well, if you cannot extend the tracker rate the whole question is moot anyway.

But it will not cost £7K in total as each year the interest is being charged on less and less as the capital is repaid.

Also..

When Barclays base rates change the maths changes
When your three year rate ends the maths changes

flambardsdivided

Thank you. I understand.

And you're right the point is moot! I think we're just trying to get a sense of the impact of their sudden change in policy.

Thanks again for replies. it's all very helpful.

Thrugelmir

As an observation. If you struggling to bridge a monthly outgoing of around £226 at the level of current interest rates. Will you pass affordability stress tests.

In the best case scenario in 3 years time you'll still owe around £182,300. With 5 year fixed rate products at just say 4% interest. Your monthly outgoing would then be £1,363. An increase of £207.

At a stress test level of say 5.5%. Over a 15 year term. Your repayments would be £1,506 an increase of £350.

flambardsdivided

Thank you Thrugelmir. These are good observations that partner and I have been looking at. Our financially situation is likely to improve, with impending pay rises and some likely inheritance. But we're not taking anything for granted and ensuring that we can viably pay the mortgage in the future is absolutely on our minds.

Thrugelmir

flambardsdivided wrote: »

But we're not taking anything for granted and ensuring that we can viably pay the mortgage in the future is absolutely on our minds.

Your lender won't be assuming anything either. All that matters is the facts at the point of application. There's no guarantees as far as the future is concerned.

getmore4less

If you can't extend the term of the ported part what about extending the term of the new bit.

You will be paying the capital off quicker for the same payment as putting it all on the 3y fix at 18y.

Another option may be just port the really low rate on the £37k and fix the other bit it is only 0.29 more and one rate rise will kill it on the tracker.

getmore4less

Looking at the options and amount owing in 3 years which is the date you need to change again.


£216k @ 1.64% 18y £1156pm £184,259.

porting both bits
£16k @ 1.35% 9y £158pm £10,860
£37k @ 0.69% 9y £354pm £24,900
£163k @ 1.64% £644pm £147,467 (26y ish)

total £183,227 £1k saved over 3 years keeping both tracker rates

or just port the low rate bit

£37k @ 0.69% 9y £354pm £24,900
£179k @ 1.64% £802pm £158,447. (22y 4m ish)

Total £183,347 £900 saved and reduced risk of rate rises.

The longer term on the new bit won't cost more, what you pay and rates determine the real cost.

flambardsdivided

Thank you so much for your considered responses and for the maths. It's greatly appreciated.