Switching from low-rate tracker - am I mad?!

Will006

payless said:

Not that it would change your decision…. Are you sure your base+0.36 also has 16 years left on it? Think that was likely a 2007/8 product ?? 

Yes, I got it in early 2008.

hampshiretaf

getmore4less said:

hampshiretaf said:

I’m in exactly the same situation as you. I’ve just refixed at 1.34% one element that just finished the prior deal. But I have a further £50k on a tracker at 0.89% above base. It has served me well for the last few years. Ten years left to go. I’m having the same internal debate. Fix it too for five years and pay a few bob more per month? BR only needs to rise to 0.5% for the new deal to be better (in the five year outlook anyway). I prob should do it?

Many people get that wrong, your tracker starts out 0.35 lower than your new rate accumulates saving till rate rise which give headroom going forward.

True - I appreciate the BR might not zoom up to 0.5% (or beyond) straight away, but with my very limited economics knowledge with inflation going the way it is (or the media saying it is), it feels like the BR will tilt upward fairly quickly and of course then the 1.34% wouldn’t be available. 

Will006

Having spent the last few days agonising, I think I'm now going to ditch the tracker (£90k at BR +0.36%) and put both sub accounts (the other being £38k) on the 5yr fixed 1.09% TSB is offering.

Rates only have to get to 0.75% for me to be paying more on the tracker than I would on the fixed, and going by recent reports it's not inconceivable that this could happen sometime next year.

If rates are sky high when the 5yrs is up, I'll be glad I fixed for that time. If they stay low, I should hopefully be able to fix for a similar rate.