0.49% Lifetime Tracker, is it time to ditch?

CCob

I have 2 parts to my mortgage with Barclays.  The bulk of the mortgage still has 4.5 years left fixed at 1.6% but a portion of my mortgage has been on a lifetime tracker of 0.49% above the base which has served me well over the last 15 years.  It seems a lifetime tracker of 0.49% is very good, so with the rising interest rates, is it worth me losing this deal or should I ride the storm over the next few years.  I would be stuck with Barclays deals since I have 2 parts, at the moment I have an offer of 2.7% fixed for 5 years, which would be 1.25% more than I am currently paying on my lifetime tracker. 

Thanks      

handful

It depends. How many more years left on the tracker? How much is the set up fee? I've got a similar tracker and I've got no intention of changing because what you don't know is what would be available after the 5 year fix. A lifetime tracker is valuable for that reason because you will never get that good a tracker again.

CCob

Yea, this my my feeling at the moment too is to keep it.  I have 18 years left on the lifetime tracker.  The setup fee for the 2.7 fixed is 0, so it's a straight switch.

K_S

@ccob Personally I wouldn't ditch a base+0.49% lifetime tracker at this point in time.

kingstreet

K_S said:

@ccob Personally I wouldn't ditch a base+0.49% lifetime tracker at this point in time.

Me neither!

D123456789

@K_S @kingstreet may I ask your reasons why? I am on a lifetime tracker base +0.69 and considering a fix. I am very interested in others opinions on this. 

simon_or

It's a great product, available for the whole term and fully flexible.

I would say it is mostly down to your personal preferences and risk appetite but as far as I'm concerned, I'd hold on to the tracker.

raf300

Seems a lot of people are asking opinions on whether to ditch a tracker and go fix. 

We are in the same position but our tracker is higher, base+ 1.79%. 

Looking at the main lenders, we would have to go for a five year fix deal and not move to benefit, as the fees and ERC involved would wipe out any gains made from switching. 

 As we are thinking of moving, if the right house comes up we haven’t switched but the outlook of future rate rises is making us rethink about switching. 

When we got the mortgage deal over 10 years ago the base rate was higher, so we have benefited from the rate falling and now it is on its way back up. 

It is still not at the the initial rate we got but getting close, however our loan is under half so rises in the rate doesn’t cost a lot. However saving where you can all helps. 

Mish_Mash

I am in exactly the same position and am in two minds as to what to do. I have had an interest only tracker for the last 15 years. I have 15 years left at base+0.9. I am now repaying my mortgage and aim to have it fully repaid in 5 years ( taking advantage of the absence of early repayment charges) I can also repay the bulk of the mortgage if I need to should the situation significantly worsen (from pensions savings). I don’t want to do this as they are my savings and what I can fallback on if I lose my job or use as a lump sum at retirement, but it’s nice to have a safety net. 

I am worried about interest rates. Everything seems very unstable now. The British economy doesn’t appear to be that strong and I believe we are in a recession. I am wondering how bad it will get and if it’s worth fixing now so that monthly bills are understood and guaranteed. 

I have spoken with a financial advisor who has said I will never get a deal as good again, he has suggested a 10 year interest only fix. I am just confused as to what to do and would appreciate any advise. 

raf300

@Mish_Mash

Hard question as your tracker is only 0.9% plus base. So much lower than ours. 

All depends on how much outstanding balance you have left. 

My thoughts are if you are not planning to move then you could fix for 5 years. 

In which you could decide either to shorten the term from 15 years to either 5 years or something in between. 

The interest rate for a fix will likely be slightly higher than what you are on at the moment. 

But it will be fixed. 

Another option is to fix for the current mortgage length. So your minimum payments are less but can pay up to either 10% of the loan amount on top each year. Depends on the lender. 

Any extra money you wanted to put against the mortgage each month but can’t due to the 10% overpayment rules, you can save it. 

Then at the end of the 5 year fix deal , you can pay a chunk of the mortgage off before remortgaging. 

A comment I read over the weekend is that a mortgage is a longterm loan so there will be ups and downs in the rate. 

So you could stick with your tracker rate and just keep overpaying when you can. 

No one knows how many more raises there will be in the base rate. As ever paying more interest is not a nice feeling when you don’t have to, so fixing gives you that peace and assurance. 

@simon_or  and others, have posted some good responses in  this thread and others. So worth reading them too. 

Mish_Mash

raf300 said:

@Mish_Mash

Hard question as your tracker is only 0.9% plus base. So much lower than ours. 

All depends on how much outstanding balance you have left. 

My thoughts are if you are not planning to move then you could fix for 5 years. 

In which you could decide either to shorten the term from 15 years to either 5 years or something in between. 

The interest rate for a fix will likely be slightly higher than what you are on at the moment. 

But it will be fixed. 

Another option is to fix for the current mortgage length. So your minimum payments are less but can pay up to either 10% of the loan amount on top each year. Depends on the lender. 

Any extra money you wanted to put against the mortgage each month but can’t due to the 10% overpayment rules, you can save it. 

Then at the end of the 5 year fix deal , you can pay a chunk of the mortgage off before remortgaging. 

A comment I read over the weekend is that a mortgage is a longterm loan so there will be ups and downs in the rate. 

So you could stick with your tracker rate and just keep overpaying when you can. 

No one knows how many more raises there will be in the base rate. As ever paying more interest is not a nice feeling when you don’t have to, so fixing gives you that peace and assurance. 

@simon_or  and others, have posted some good responses in  this thread and others. So worth reading them too. 

Thank you for your response. Much appreciated. All sensible advice. And ultimately I suppose it’s a matter of personal preference and what makes you feel the most comfortable/uncomfortable. I just need to take some time out to think and make a decision. I am a bad decision maker 😬