Lifetime tracker or fix?

Daniellechers

Hi all,

I am on a lifetime tracker (13 yes left) with a rate of 0.95% + base rate. With the news of interest rate rises estimated to reach 1.25% by December I am considering whether I should fix to avoid potential rises further down the line. Read rates could rise another percent or two by 2024. Obviously no one actually knows what will happen.
 
However, I can get a fixed rate 10yr deal (no plans to move etc) for 1.75% plus £999 fee. LTV is around 30%. I know there is no right or wrong answer as it is all guess work but just wanted other peoples opinions on what they would do? Concerned if I wait a while and rates rise I will miss the boat on a lower fixed rate.

Thanks for reading

getmore4less

important information missing.
Lender(s)
Amount
Planned payment
What's the no fee rate.
What 5y rates on offer

Any features of the tracker you would lose.

Thrugelmir

BOE base rate could move as early as this Thursday up 0.25% to 0.5%.  The opportunity to lock in to long term cheap fixed rates is disappearing rapidly. 

Daniellechers

Current lender is Barclays. £103,000. I also have an additional mortgage on the property with Barclays £27,000 which is fixed for 3.5 more years. That one is £190 a month and currently overpaying by £100 a month.

Best 5yr no fee HSBC = 1.59% £731
Best 5yr with fee HSBC = 1.44% £724

Best 10yr no fee Barclays = 2.07% £754
Best 10yr with fee TSB = 1.74% £734

Not sure of tracker features. Sorry - all pretty new to this as always just been on the lifetime tracker.

Thank you

Daniellechers

There are no early repayment fees on our lifetime tracker

getmore4less

Daniellechers said:

Current lender is Barclays. £103,000. I also have an additional mortgage on the property with Barclays £27,000 which is fixed for 3.5 more years. That one is £190 a month and currently overpaying by £100 a month.

Best 5yr no fee HSBC = 1.59% £731
Best 5yr with fee HSBC = 1.44% £724

Best 10yr no fee Barclays = 2.07% £754
Best 10yr with fee TSB = 1.74% £734

Not sure of tracker features. Sorry - all pretty new to this as always just been on the lifetime tracker.

Thank you

What's the rate, term and ERC on that bit?
current 5y fix its 3% so could be around £800
 
You can't move just the tracker to a new lender.

£103k on 1.2% 13y ~£715pm (depends if you made use of barclay's keep the payment the same)

add that to the £190+£100  round to paying £1000pm

Lets start with these 2.

Best 5yr no fee HSBC = 1.59% £731
Best 5yr with fee HSBC = 1.44% £724


they finish end April 2027 say 62months

Moving £130k over 13y add the fee make the payment the same.
what's left in 62 months

amount	rate	payment	owing
£130,999.00	1.44%	£922.97	£81,740.84
£130,000.00	1.59%	£922.97	£81,523.33

no fee better by ~£220

larger payment(£1k) makes the no fee even better by a bit.


Now Barclays 10y with/without fee on just £103k  they end may 2032 that's 123 months

amount	rate	payment	owing
£103,749.00	1.95%	£753.64	£24,163.86
£103,000.00	2.07%	£753.64	£24,155.24

less than £10 in it, any overpayments will make the no fee better.

Now Barclays against the TSB options. they also have a 5y ERC no fee product.
using the £130k and £1k pm(really needs the £103k & £27k barclays comparison)

amount	rate	payment	owing
£130,745.00	1.95%	£1,000.00	£23,614.45
£130,000.00	2.07%	£1,000.00	£23,806.23
£130,995.00	1.74%	£1,000.00	£22,006.44
£130,000.00	2.19%	£1,000.00	£24,924.66

There would be the ERC and any other fees to move to TSB that will eat into that £1,600 saving over 10years


Barclays also have a 1.39% 999 fee 5y product. end May 2027
Comparing that(and the no fee) on £103k with HSBC

amount	rate	payment	owing
£103,999.00	1.44%	£733.13	£64,868.58
£103,000.00	1.59%	£733.13	£64,472.29
£103,999.00	1.39%	£733.13	£64,640.45
£103,000.00	1.63%	£733.13	£64,654.53

HSBC ~£270 cheaper but ERC from the other bit to factor and changing lender costs/time.

Now lets do a 5+5 on the £103k against the 10y using £754 payment
(fiddle using the ERC to make the 10y no fee and the first 5y with fee second no fee)

Mortgage	£103,999
payment	£754	ERC/FEE
rate	1.39%	-£999
new rate	2.07%	£0
Time	Years	months
Left on current	5	3
New fix term	10	3
amount left after(months)		63
Start	rate	End
£103,999	1.39%	£62,619
£103,000	2.07%	£64,680
amount left after(months)		123
£103,999	1.39%	£20,302
£103,000	2.07%	£24,106
Switch when ERC £0
Break even rate needed no fee and fee)		60
£62,619	3.046%	£24,106

for these 2 options the bet is the second 5y will be more than 3% so the 10y is better.


worst case  is rates do nothing and your tracker stays at 1.2%

amount	rate	payment	owing
£103,000.00	1.20%	£754.00	£17,839.49
£103,000.00	2.07%	£754.00	£24,105.87

~£6.2k  that drops around £2k per 0.25% rise now, less the longer it takes to go up. 


If you can find £1180pm you could have this all paid of in around 10y

Daniellechers

Thank you so much for your response. The smaller mortgage is 1.78% fixed for 5 years until August 2025. I’m not sure of the ERC but can check later. Appreciate your help

Newnoel

Best 10 year fix from Lloyds is now 1.66% plus £1k fee:
Halifax and Lloyds best buy 10-year fix mortgages ahead of base rate rise  | This is Money

Daniellechers

@getmore4less ERC is £811. Can get 1.66% Lloyds with £750 cash back as a Club Lloyds account holder. Thanks to @Newnoel for the heads up on Lloyds. Would be £926.85 for both mortgages combined into one for 10 year fix repaying over 13 years. Would this be the better option or stay with Barclays on 2.07% no fee £754 for 10years plus £190 for 5 year fix for separate mortgage. Thanks for your help

Daniellechers

Should have said total owing for both combined is £129,971 (£102,924 + ££27,047)

getmore4less

Daniellechers said:

@getmore4less ERC is £811. Can get 1.66% Lloyds with £750 cash back as a Club Lloyds account holder. Thanks to @Newnoel for the heads up on Lloyds. Would be £926.85 for both mortgages combined into one for 10 year fix repaying over 13 years. Would this be the better option or stay with Barclays on 2.07% no fee £754 for 10years plus £190 for 5 year fix for separate mortgage. Thanks for your help

The cashback pretty much eliminates the ERC(net £6)  any other fees?

Adding all the fees to the £103k over 10 years a 1.66%rate saves around £2k over the Barclays option.

The second bit goes to a lower rate 1.66% from 1.75%  saves about £100 over 3.5y  then still locked it in for another 6.5y

still showing 1.74% on the sites.