0.84% tracker move to 10 year fixed at 2.49%

PeterGoodwin

Good Morning All,
We are currently on lifetime tracker with FD which tracks at 0.34% above the base rate. We have 11.5 years left on our mortgage and I'm tempted to hop to their 10 year fixed at 2.49% with the intention of paying it off in 10 years. We pay £1042 a month at the moment and the 10 year fixed would bump this up to £1145. Most people are saying do the 10 year for peace of mind but I guess it feels a bit painful leaving such a good tracker deal.
Some of your opinions would be greatly appreciated on what I feel is a tricky decision.

getmore4less

Crunch the numbers for 10 years
(those rates and payment suggest around £137,000-£137,300)

Amount left after 10years
£137k 0.84% £1145pm £5,717
£137k 2.49% £1145pm £19,854

Up to £14k more over the 10 years

play with some rate rises and see what happens to the difference.


If you pay more the difference gets smaller.
To pay off in 10y @ 2.49 it's £1294pm

amnblog

Why pay triple the current rate now?

Unless you think the base rate is going to go over 2.15%, what are you gaining?

PeterGoodwin

Great responses, thank you!!!

I guess I'm concerned that the base rate is so low and the average going on past rates has been around 5/6%. This is leading me to feel over a 10 year period it's more likely than not to rise back up to the 5% mark. If the rate is increased in May by 0.25% as anticipated the 2.49% fixed will then be increased too. Obviously, I can only best guess what might happen with future rates.

Psyduck1980

Stick with your tracker (it's a great deal) and pay off as much as you can each month.

Thrugelmir

If you are looking for peace of mind. Now is the time to lock in. Fed has now raised rates 6 times since December 2015. Two more increases are forecast this year. An indication of the likely course the BOE will follow. As the UK is some 2 years behind the curve following the financial fall out from the GFC. While the Eurozone lags behind further.