Tracker - Am I nuts....

chrisrawles

Evening all,

We've just entered into the last 6 months of our fixed rate deal which is at 1.54%.  After looking around at deals, it would seem most fixed rates are now pushing the 6% mark on a 5yr term,

I've seen a 2yr tracker for 3.78% which is appealing in terms of keeping the monthly payment down.  Downside is this will almost certainly increase during the term but,  is it worth the gamble?  Base rate would need to increase another 2% (approx) to get to the level of interest the fixed rate deals are offering.

Interested in the thoughts of those more experienced borrowers on here.  

housebuyer143

I am riding a tracker at 0.8% above base and think the same way. I won't fix at the current rates and circumstances meant I wasn't in a position to secure a fixed rate earlier unfortunately. 

It's certain the base rate will rise but past 5% or 6%, I'm not sold on that and then my tracker is no more than the fixes. 

chrisrawles

These are interesting times for sure.  I have a call with my mortgage advisor tomorrow so will see what he thinks based on my thought process.

Ibits4321

I'm expecting base rate to increase by 2% at the next meeting

housebuyer143

Ibits4321 said:

I'm expecting base rate to increase by 2% at the next meeting

I would be incredibly surprised.. 1% max and even that's a push. I think two more larger rises this year and then smaller one's into the new year.

big_vern

Ibits4321 said:

I'm expecting base rate to increase by 2% at the next meeting

Based on what?, there was a speech by someone on the B of E MPC who set the rates a few nights ago, he voted a .75% rise last time but was outvoted

dunstonh

Ironically, the lack of increases by the BoE have probably increased mortgage rates by more than had the BoE upped the base rate quicker and higher.

london21

2 more rate increases this year.

In the short-term rates will be high but see things calming down but not 1% again. 

goodwithsaving

Does the tracker have ERCs? If not, I'd probably go with that and see how the next year goes, then jump to a fixed.

simon_or

chrisrawles said:

Evening all,

We've just entered into the last 6 months of our fixed rate deal which is at 1.54%.  After looking around at deals, it would seem most fixed rates are now pushing the 6% mark on a 5yr term,

I've seen a 2yr tracker for 3.78% which is appealing in terms of keeping the monthly payment down.  Downside is this will almost certainly increase during the term but,  is it worth the gamble?  Base rate would need to increase another 2% (approx) to get to the level of interest the fixed rate deals are offering.

Interested in the thoughts of those more experienced borrowers on here.  

Since you're inside 6 months, get a tracker offer, get a 5yr fix offer and then 5 months down the line you can decide which one to proceed with. A lot can happen in that time. Gilts and swap rates are still on the up so don't delay on securing a fix.

PK_London

Ibits4321 said:

I'm expecting base rate to increase by 2% at the next meeting

The markets have priced in 0.75 although given the current turmoil it might even be a whole 1%. I expect base rates to hit 3.5% by the end of the year.

However, I'm a bit mystified how mortgage rates will react given there is so much risk priced in now. Base rates 2.25 and mortgage rates near 6.25 - that 4% difference is far from normal. With that said, I think a tracker close to the base rate is probably now everyone's best option