Was this a wise move?

taffowl

I have mortgage with The Coventry that has two parts:

Part 1 - ~£52k balance with 19 years left (legacy 0.75% BOE rate tracker that I ported from a previous house where my fixed deal ended)

Part 2 - ~£70k balance with estimated 11 years left due to over payments - (10 year fix at 2.75% until Dec 2027)

I really didn't want to give up the 0.75% BOE base rate tracker but after watching the markets since Friday I wanted a bit of security in my outgoings and decided to switch. I applied online for a 10 year Flexx fix for part 1 of the mortgage at 4.5%. It increases my monthly outgoing a bit but not a lot in the grand scheme of things. I just can't see rates being low for a long time again. My plan is to overpay this mortgage by the same amount and pay off in 10 years. One we get to 2027 I may re-consider moving providers as there is no early repayment clause on the new 10 year fix.

The day after switching I've seen the same deal increase above 5.5% and then removed completely, so I'm just hoping the online switching process means my deal was locked in after applying for it online. I'm nervously awaiting the letter in the post!

Still part of me wonders IF I should have ridden this out to keep the low rate tracker ??

london21

taffowl said:

I have mortgage with The Coventry that has two parts:

Part 1 - ~£52k balance with 19 years left (legacy 0.75% BOE rate tracker that I ported from a previous house where my fixed deal ended)

Part 2 - ~£70k balance with estimated 11 years left due to over payments - (10 year fix at 2.75% until Dec 2027)

I really didn't want to give up the 0.75% BOE base rate tracker but after watching the markets since Friday I wanted a bit of security in my outgoings and decided to switch. I applied online for a 10 year Flexx fix for part 1 of the mortgage at 4.5%. It increases my monthly outgoing a bit but not a lot in the grand scheme of things. I just can't see rates being low for a long time again. My plan is to overpay this mortgage by the same amount and pay off in 10 years. One we get to 2027 I may re-consider moving providers as there is no early repayment clause on the new 10 year fix.

The day after switching I've seen the same deal increase above 5.5% and then removed completely, so I'm just hoping the online switching process means my deal was locked in after applying for it online. I'm nervously awaiting the letter in the post!

Still part of me wonders IF I should have ridden this out to keep the low rate tracker ??

I am usually a fan of fix rate but you seem to have had a good tracker rate and fix until 2027.

Rates in the short term will be high, not sure what happens next but might not be back to record low but record highs either.

I prefer 5 years to 10 years personally as 10 years is such a long time and a lot can happen.

Hopefully made the right choice.

A lot of lenders are pulling rates because of the uncertainty but the next BOE increase will be high.

ACG

Coventry so far (as far as I am aware) have not been passing on the full rate rises. 

taffowl

I did consider 5 years which had a slightly lower rate but was worried about two parts of the mortgage needing re-fixing at a similar time and it being pot luck if the market conditions will be good at that point. I suppose worst case is that I can get out of the new 10 year fix by paying the balance off with no ERC and moving to a new lender on a consolidated mortgage.

At least the last 12 years have been pretty good for rates but it was never going to last.

taffowl

ACG said:

Coventry so far (as far as I am aware) have not been passing on the full rate rises. 

Was that on their SVR rates though? Mine was BOE base rate tracker, a fixed deal I took out in 2006 that when ended moved me to a 0.75% BOE base rate tracker. I've been getting letters in the post after every interest rate rise recently advising of my increase in mortgage payment. I'm currently at 3% now.

ACG

Good point. 
I think it is anything that follows the coventry base rate.