Tracker rate mortgage

phillsmit3

Just wonder what everyone thinks?
I'm currently on a lifetime tracker rate mortgage which is 1.89 above base. 
I think this is quite good for a tracker and as it's lifetime I don't have to keep paying arrangement fees.

As interest rates are expected to rise even further I've been considering fixing for a few years to stop my costs going up but then I'll lose my current deal forever. 

I'm OK financially so I can ride out the interest rate increases but obviously I would like to save money in the long run. 

What do you guys think? 
Am I best staying on the 1.89 lifetime tracker and ride out the coming bad times. 
Or would I be best to switch to a fixed rate deal ASAP and when the fixed period ends try and find another good mortgage deal. 

Your thoughts would be greatly appreciated as I don't want to do anything silly that I'll regret. 

simon_or

I think it would come down to three things - how big your mortgage is,  how comfortable you would be if rates go up above the fixed rates available now in the market and what you think about the trajectory of interest rates in the next 2-5 years.

If you factor in a further 1% rise in BOE rate by the end of the year (which I'd think is quite conservative), then you'll be at 5.14% already which is probably higher than the fixed rates you can access now.

If that (or rates higher than that) put you in an uncomfortable financial situation, then fixing might be worth it even if in hindsight it turns out to be more expensive than simply staying on the tracker.

Where mortgage rates will go is anyone's guess (mine is that it will stay elevated for at least 2 years) so you might be better off giving more weightage to your situation and attitude to risk rather than market predictions.

housebuyer143

phillsmit3 said:

Just wonder what everyone thinks?
I'm currently on a lifetime tracker rate mortgage which is 1.89 above base. 
I think this is quite good for a tracker and as it's lifetime I don't have to keep paying arrangement fees.

As interest rates are expected to rise even further I've been considering fixing for a few years to stop my costs going up but then I'll lose my current deal forever. 

I'm OK financially so I can ride out the interest rate increases but obviously I would like to save money in the long run. 

What do you guys think? 
Am I best staying on the 1.89 lifetime tracker and ride out the coming bad times. 
Or would I be best to switch to a fixed rate deal ASAP and when the fixed period ends try and find another good mortgage deal. 

Your thoughts would be greatly appreciated as I don't want to do anything silly that I'll regret. 

There are a few lifetime trackers on the market much lower than this, but if you go for a 2yr or 5yr, many are tracking at 0.8-0.9 above base so that's a huge saving. 
In your position I would change to a cheaper tracker but that's just me. 

jj_43

What you could do is ensure that your tracker is as close to the base rate as possible.
Fixed rates already reflect expectations of further change in the BoE interest rate. Market rates went up 0.25% on Friday alone. 
Over the long run following the base rate (a tracker) as close to the base rate would be the cheaper option.
People often fix at the worse time, when rates have gone up and for that protection they pay higher interest rates.

phillsmit3

Thanks for all your comments. I don't think there is a correct answer but wanted some reassurance that I was thinking along the correct lines. 
I don't think I'm going to fix at the moment. Think I've already missed the boat on that one. 
I think I'll stay with my lifetime tracker because I can see myself regretting getting rid of it in a few years time. 
Also it is a faff to remortgage so if there is no clear benefit to changing mortgage I'm not going to bother. 

Snookie12cat

phillsmit3 said:

Thanks for all your comments. I don't think there is a correct answer but wanted some reassurance that I was thinking along the correct lines. 
I don't think I'm going to fix at the moment. Think I've already missed the boat on that one. 
I think I'll stay with my lifetime tracker because I can see myself regretting getting rid of it in a few years time. 
Also it is a faff to remortgage so if there is no clear benefit to changing mortgage I'm not going to bother. 

The benefit to moving is a 1% reduction on the tracker. I do recommend you looking into different trackers because you are overpaying. Potentially the lender you are with has other tracker products you could potentially product switch to? 
It's really no bother to change then. 

CSL0183

Due to the £ plummeting and gilt bonds increasing the BOE will react. Suspect another 75-100 points at the next meeting. 

CSL0183

CSL0183 said:

Due to the £ plummeting and gilt bonds increasing the BOE will react. Suspect another 75-100 points at the next meeting. 

Twitter is full of “experts” predicting BOE BR to hit 5.5-6 next year. 

Anyone that can fix should probably fix. 

K_S

housebuyer143 said:

phillsmit3 said:

Just wonder what everyone thinks?
I'm currently on a lifetime tracker rate mortgage which is 1.89 above base. 
I think this is quite good for a tracker and as it's lifetime I don't have to keep paying arrangement fees.

As interest rates are expected to rise even further I've been considering fixing for a few years to stop my costs going up but then I'll lose my current deal forever. 

I'm OK financially so I can ride out the interest rate increases but obviously I would like to save money in the long run. 

What do you guys think? 
Am I best staying on the 1.89 lifetime tracker and ride out the coming bad times. 
Or would I be best to switch to a fixed rate deal ASAP and when the fixed period ends try and find another good mortgage deal. 

Your thoughts would be greatly appreciated as I don't want to do anything silly that I'll regret. 

There are a few lifetime trackers on the market much lower than this, but if you go for a 2yr or 5yr, many are tracking at 0.8-0.9 above base so that's a huge saving. 
In your position I would change to a cheaper tracker but that's just me. 

@housebuyer143 Out of professional interest, which lenders are these please?

I had a client with the same requirements last week but couldn't find any life-time/term trackers, only life-time/term discount variables which track the individual building society's SVR and not the BoE rate. My sourcing should show direct-only products as well (that doesn't always work properly) but I didn't see any lifetime/term trackers at all.

housebuyer143

K_S said:

housebuyer143 said:

phillsmit3 said:

Just wonder what everyone thinks?
I'm currently on a lifetime tracker rate mortgage which is 1.89 above base. 
I think this is quite good for a tracker and as it's lifetime I don't have to keep paying arrangement fees.

As interest rates are expected to rise even further I've been considering fixing for a few years to stop my costs going up but then I'll lose my current deal forever. 

I'm OK financially so I can ride out the interest rate increases but obviously I would like to save money in the long run. 

What do you guys think? 
Am I best staying on the 1.89 lifetime tracker and ride out the coming bad times. 
Or would I be best to switch to a fixed rate deal ASAP and when the fixed period ends try and find another good mortgage deal. 

Your thoughts would be greatly appreciated as I don't want to do anything silly that I'll regret. 

There are a few lifetime trackers on the market much lower than this, but if you go for a 2yr or 5yr, many are tracking at 0.8-0.9 above base so that's a huge saving. 
In your position I would change to a cheaper tracker but that's just me. 

@housebuyer143 Out of professional interest, which lenders are these please?

I had a client with the same requirements last week but couldn't find any life-time/term trackers, only life-time/term discount variables which track the individual building society's SVR and not the BoE rate. My sourcing should show direct-only products as well (that doesn't always work properly) but I didn't see any lifetime/term trackers at all.

It's been a few weeks actually since I looked so in the current climate that's probably a lifetime ago lol.

Might have been the 2 or 5 I saw more recently at lower rate trackers.

phillsmit3

Might bite the bullet and go for a 5 Yr fix. 
Thanks everyone for helping me mull it over.