Fixed rate or tracker? Looking to sell within 18-24 months

sturgeon

My fixed rate with Halifax has ended and I'm now on the expensive SVR, so I am remortgaging currently (also paying off my Help to Buy loan).


The likelihood is that by next spring I'll be looking for a new home, to move late next year or early 2020. It depends if I buy a new build or not.


A fixed rate puts me off as most are minimum 24 months with hefty early repayment charges. The best fixed rate deal rate (including ERC) compares very similarly to the best tracker rate deal in terms of the monthly repayment. The benefit of the fixed rate being obvious, the benefit of the tracker being no early repayment charge on this deal. Downside of fixed rate is not being able to move for 2 years and downside of tracker is I'm nervous about rates shooting up.


What's the best option here and what are general expectations for interest rises over the next 18 months? My best fixed rate with ERC is around 1.8%, the same as the tracker rate (but obviously includes the 24 month tie in). The best fixed rate with no ERC is about 2.2%, so if the BOE rate increases by 0.5% I'd be in the worst position overall.

pinknsparkly

It very much depends on the size of your current mortgage, your current interest rate and any mortgage arrangement fees/valuation fees etc that you'd have to pay for.

Try using this calculator the "wrong" way round:

https://www.moneysavingexpert.com/mortgages/fixed-mortgage-calculator

Where it ask for info about your current mortgage, put in the details for the fixed rate mortgage you're considering and if the "Only ditch your fix if you can get a mortgage with a rate less than..." value is more than your current SVR then you'll save money by switching.

As for whether or not BOE rates will rise, if I could tell you that then I wouldn't currently be sat in work!