Tracker mortgages

needhouseadvice

I need to remortgage and am thinking of selling my flat. I lost my job recently so won't be able to do that until I get another job so I was thinking of switching from a fixed to a tracker. I've been offered one which has no exit fees. It would be the same monthly cost of a fixed so it gives me the freedom to sell up when I want to but is it a good idea to get a tracker given the current economy? I know no one has a crystal ball but are interest rates predicted to increase or go down?

The alternative is to get a one year fix which would give me enough time to get a new job and also take me past the new Brexit date in October.

Any advice?

SouthLondonUser

You want a prediction on where interest rates will go? Good luck with that...

Everyone has their opinion. But, if you are looking at a 6 to 12-month horizon, does it really matter that much?

Also: same monthly instalment or same rate?

Remember, (unless you are on an interest-only mortgage) every payment comprises capital + interest. The capital repayment is not a cost - that's money you are repaying to yourself. The cost is interest + upfront fees.

Get a spreadsheet and compare a few mortgages, calculating how much you will have paid in interest + fees after 6, 9, 12 months etc.

Thrugelmir

Tracker mortgages can only drop so low. Lenders need to make a margin. Lenders are able to offer very low rates thanks to the BOE's funding policies in recent years. The tap has now been turned off.