Which mortgage to choose....any ideas?

potpot

Hi everyone,
I have a bit of a dilemma in choosing my new mortgage. I am just coming to the end of a two year fix with Britannia at a rate of 4.24%. I normally choose a fixed rate because I like the stability but with talk of interest rates coming down I don't want to be paying over the odds.
At the moment I do have a bit of spare cash at the end of every month, about £200. Is this enough of a cushion for me to ride the storm of a rate increase if I choose a tracker mortgage?
I am thinking of going with Britannia again. Although the fees for the mortgages they have outlined are about £500 I will get back £150 because I am in Unison and if past years are anything to go by I get yearly bonuses from them of about £130 per year.
The options are 2 yr fixed at 5.94% or
2 yr Discounted Tracker at 0.05% above BofE base rate.
I am borrowing £87,000 ish.
I really am having problems making the decision....any pearls of wisdom please

sammyjammy

Hi there, the rate you quote for the tracker is currently 5.8% is that right, its pretty low, you don't say what term you are borrowing but for a 15yr loan each 0.25% rise would cost you around (monthly payment £725 ish at 5.8%) £11 so there would have to be an interest rate rise of over 4.5% to use up your £200!On the same term the fixed would cost you £731 so currently there isn'tm uch in it, I can't advise you what to do but I've owned a property for 8 yrs and have just taken a tracker out for the first time, like you I've considered the rise I can afford and the likely risk which is all you can do at the end of the day.SamPS I just used a mortgage calculator and palyed around with the figures.

sammyjammy

Apologies for lack of paragraphs, they didn't work and then it wouldn't let me edit it!

crazybass

I got someone coming round to see me later today about remortgage, im with BOS at the moment and checked up with them on there tracker for 69000 over 14 yrs i was 613.61 a month at 6.39% i think i will se what the guy today can offer, been looking about and some of the set up fees are shocking... think they are 0.64 above bast rate..

potpot

Thanks for that, I got my mortgage quote in the post today for the tracker and although I'm going to reduce my term from 21 years to 20 when (if) I accept the offer the monthly repayment they quoted is £595.07.
The 0.05% above base rate sounds pretty good to me too.
Choosing makes a difference when you factor in the fees they are going to charge. With Britannia I can claw back almost all the fees over the two year period.
My maths needs to be better to work out the relative difference between paying higher fees and a lower interest rate or lower fees and a higher interest rate. Is there a calculator for that?