Buy to Let Mortgage -opinions fix at 5.85, tracker or stay on variable rate!

jivjules

Hi

I know there are no Crystal balls and it changes daily but we are currently on a variable rate of 3.74% for a buy to let mortgage on 2 properties mortgage amount of 153,000 combined. We've been trying to fix but got caught up in everything and basically missed the boat - the fix we've now been offered is 5.85% which feels very high - even with the uncertainty if peaks are unlikely to be much above 6%. Tempted to either take a discounted (currently offered 2.74% discount with current rate of 3.4% or even just stay on the variable rate we have which is currently 3.74%. Another consideration is that if we switch we will need to pay 2 lots of fees as we have 2 properties so would be 2 mortgages, currently we have one mortgage that covers both.

I'm tempted to just stay where we are, accepting it's a gamble and we may loose a bit for 6 months but likely still gain over all - one property is currently empty but if we can get it rented out by spring (it needs work on it) then the rental income of the two properties would cover up to £1000 a month which would cover interest rates going up to around 8% which seems unlikely to go much higher than that. I'm not very savvy - just wondering if I'm mad to gamble? What would you do? Thank you so much!

simon_or

3.74% SVR seems very good, I'd just leave it on that and hammer away at the capital trying to reduce the size of the mortgage. That's what I'm trying to do for a BTL remortgage coming up late next year.

If you won't have any spare cash at all to make any capital overpayments, then I'd consider the merits of a fix.

jivjules

simon_or said:

3.74% SVR seems very good, I'd just leave it on that and hammer away at the capital trying to reduce the size of the mortgage. That's what I'm trying to do for a BTL remortgage coming up late next year.

If you won't have any spare cash at all to make any capital overpayments, then I'd consider the merits of a fix.

Thanks - we can't overpay much at the moment but could potentially once the property is rented out - though that might just get eaten up by the interest only by then! just spoke to my current mortgage company it's about to go up to 4.25% if that makes a difference - its Base rate +1.99% So could go as high as 8% or so in the peak......