Base Rate Tracker mortgage

Gordon3016

Hi - After some advice. We have a Base rate tracker (old Abbey flexible mortgage) which tracks base rate plus 0.49%, so our rate is now 2.74%.  We have £240k on our mortgage.  I'm really unsure whether i should fix at a higher rate or just stay on this mortgage as the rate is still lower than most fix rate mortgages. But since our March payment, our direct debit has already gone up by £172 and we have not had the effect of the most recent increase added yet.

Anyone got any wise words?!!

PK_London

In my non-expert opinion staying on the tracker might be a wise move. The best fixed rates seem to be hovering between 5-6% at the moment because bank are pricing in the idea the base rate may be 5% next summer.  Even if rates hit 5% you're only paying 5.49%.

I think you have to ask yourself, do you see base rates going above 6% and staying there for years to come. 

If inflation is tamed and rates begin to fall at the end of 2023 then you can ride the rates down without needlessly locking in 5% for 5yrs. Locking in only makes sense if you can find a decent rate and want peace of mind for the next 2,5,10yrs.

What fixed rates are you being offered at the moment?

Gordon3016

Yes, this was my thinking. My rate is still lower than most fixed I can find online. It's just all so scary and I'm no expert.

Thank you for your thoughts.

Sparky79

I have a Lifetime Tracker +0.79% with 195k outstanding and 15yrs to run.

I am planning to sit tight and ride this out. It wont be pretty for a while but I dont see any huge advantage in locking in current rates here given this feels like the eye of the storm.

If you want to hedge you could apply for a fixed rate now. The offer should (should!) last 6 mths and maybe by early next year the landscape will be clearer. If things are still looking bleak you can switch to the fix