Would you ever choose to go onto SMR/SVR instead of a tracker?

TDPIX

Hi all,

When I last moved house, I ended up with a small 'second' mortgage for the extra borrowing. The 2-year fix on this expires in a few months (whilst my 'main' mortgage's fix expires in just over a year).

The gist is that I'm looking to keep the small 'second' mortgage flexible instead of fixing this for 2+ years (with Nationwide) - so that I can potentially move 'both' mortgages to a new mortgage provider next year.

When looking into my options for the 'second' mortgage, is there any reason why I wouldn't choose a tracker mortgage and instead would opt to stay on the higher SVR/SMR (when my fixed deal expires)?

From what I understand, the SVR/SMR will end up increasing pretty much in-line with the BoE base rate anyway, so would there ever be a reason why someone would choose to go onto the SVR/SMR?

I'm just curious really, and wondering if there's ever a benefit to the SVR/SMR, or whether it's just a case of apathy and mortgage companies 'cashing in'?

Thanks!

aussie_in_wales

This is exactly what I am about to do..well in May.

So my smaller fix ends in May and my larger fix ends in December.

I'm going to temporarily go onto their follow on rate, for a short time only because the deals which I'm being offered to fix with my current lender Santander are not great.

My thinking, someone correct me if I'm wrong, is that this will then give me more flexibility if I want to move mortgage providers when my larger fix come to an end. At the moment I'm at the mercy, so to speak of Santander and combining both mortgages into one, would in my mind allow me to remortgage with another provider (subject of course to checks) which may provide me with a better overall rate.

TDPIX

Yep give or take a couple of months, it sounds like we're in the same position.

In terms of Santander, I guess the question is similar: it looks as though Santander's tracker mortgage has no real restrictions (allows unlimited overpayments, no ERC etc) so potentially an argument could be made for moving the smaller fix to their tracker mortgage for the 7 months, and then you switch the whole lot to another provider?

*Shrug*, I guess it's not a massive difference either way for 7 months.

chunkytfg

Dont nationwide do Redemption free Tracker mortgages? You could remortgage the second Mortgage to one of those to get you a better rate then when the first is up for renewal just Remortgage for the whole lot and join them together fixing/Tracker etc

aussie_in_wales

TDPIX wrote: »

Yep give or take a couple of months, it sounds like we're in the same position.

In terms of Santander, I guess the question is similar: it looks as though Santander's tracker mortgage has no real restrictions (allows unlimited overpayments, no ERC etc) so potentially an argument could be made for moving the smaller fix to their tracker mortgage for the 7 months, and then you switch the whole lot to another provider?

*Shrug*, I guess it's not a massive difference either way for 7 months.

As I'm already a customer Santander have quoted me a fee of £799 to be put onto their Tracker mortgage so that's not really an option for that amount of time

somethingcorporate

I have done this over the last 12 months with all 3 parts of my nationwide mortgage. Couldnt be easier - a few clicks and you get £100 cashback (for each account!).


I'm currently tracking at 1.99% whilst having a ten year fix offer stashed in my back pocket with another provider for when the rates rise.


My situation occured exactly as yours did, smaller elements matured sooner but the SVR was punishing. The trackers were fee-less and low rates and came with cashback. Rude not to!