Base line tracker or fixed rate?

Beaujolais7

Hello we have a base line tracker mortgage (Cheltenham & Glouster, but now taken over by Lloyd's) , we are 11 years into the 25 years, we bought the house right on the crash. The house was a rental and owner had a huge tax bill that needed paid, so we got the house cheap being first time buyers and no chain. The tracker has been very good for us.
Received the January, annual statement and noticed at the end of the page saying we should think about a fixed rate mortgage. We are aware the interest could go up, on the tracker, and we could cope within reason. But what are the pros and cons of changing?
Plus the fact never missed a payment, even when I was made redundant in 2014, I did consolidate the credit cards and have a deferral, but never went bankrupt or anything like that. Would I be able to change mortgage over if I needed too?
Thanks

boo_star

Beaujolais7 wrote: »

Hello we have a base line tracker mortgage (Cheltenham & Glouster, but now taken over by Lloyd's) , we are 11 years into the 25 years, we bought the house right on the crash. The house was a rental and owner had a huge tax bill that needed paid, so we got the house cheap being first time buyers and no chain. The tracker has been very good for us.
Received the January, annual statement and noticed at the end of the page saying we should think about a fixed rate mortgage. We are aware the interest could go up, on the tracker, and we could cope within reason. But what are the pros and cons of changing?
Plus the fact never missed a payment, even when I was made redundant in 2014, I did consolidate the credit cards and have a deferral, but never went bankrupt or anything like that. Would I be able to change mortgage over if I needed too?
Thanks

A fixed rate is exactly that, fixed. Conversely a tracker mortgage tracks the current BoE interest rate.

There isn't an answer to your question, because who knows whether interest rates will go up or down?

I prefer the security of a fixed rate, other people like to gamble a bit.

getmore4less

Missing information

what rate is the tracker?

Mortgage size and LTV would also be useful.

Beware the trap of think a fixed rate is lower risk they just have different risks to the other options.

For the last few years unless on a very good tracker rate the smart choice has been short term fixed as they have had the lowest rates, with a good lender with decent retention deals they would have saved quite a bit of money.

Anyone choosing longer fixes has just locked themselves into higher payments, but that is one of the different risks.

Does the current tracker have any features that you will lose if you switch.

When rates first dropped 10 years ago some of the trackers were still the smart choice but as the fixed rated crept down to current levels many became less attractive.

base+2% should have been ditched in many cases a few years back.
base+<1% need more thought with a number crunch.

Jonbvn

getmore4less wrote: »

For the last few years unless on a very good tracker rate the smart choice has been short term fixed as they have had the lowest rates, with a good lender with decent retention deals they would have saved quite a bit of money.

This is only true when the short term trackers have very low or zero fees. It is very easy to accumulate significant costs when changing mortgages so frequently.

getmore4less

Its part of the number crunch

As a very rough guide on 2year fix each 0.1% cheaper will absorb £200 of fees for each £100k borrowed
Barclays 2y and 5y
2y 1.21 £999 fee
5y 1.54 £999 fee

you pay roughly 1.5 sets of fees on the 2 over the 5 say £1,500

0.33% difference mortgage needed around £100k to be better off on the 2year fixes than the 5y option.

AnotherJoe

Stay on the tracker. Its been good for you whilst more fearful others have gone fixed and needlessly paid more.
Rates are not going up for a while.They may even go down. And they certainly arent going up anywhere near where they might cause you a problem for years and you'd have plenty of time to switch if they started going up, they arent going to go up to (say) 5% overnight (or likely in the time span of your mortgage)