Tracker or Fixed?

Snookie12cat

I am currently on a tracker at 0.84% above base. I have today been offered a 2yr fx by my current lender at 4.19% with a £995 fee or 4.5% with no fee. 

Is it worth taking this? I have no ERCs to leave. My thinking is that by end of the year the base rate is likely to be close to 3% if not higher and then the fix isnt looking too bad.

rc28

If i was in that position i'd be taking the fix, but probably asking if they have any 5 year fixes with a similar rate.

IMO the base rate will be above 3% within a month and doubtful it'll come back down again anytime soon.

PK_London

I see base rates hitting 4% by the end of the year and 6% next year and only very slowly coming down. I'd take the fix but see if you can push it to 5yrs. 

simon_or

I struggle to see the point of a 2 year fix as I'd think a 2 year discounted variable might give you a better outcome over 2 years. If you're up for a 5 year fix then those rates look really good.

Snookie12cat

Thanks, some mixed responses here and that is exactly where my head is at. I like the flexibility to overpay as and when I want in excess of 10% a year, but also like the idea of knowing the rate will not go above 4.5%... but then, I am paying more in the short term to protect again potential future rises, at which point they need to materialize and then need to increase quickly to make it worth the fix. So many variables! The base rate needs to sit around 4% to make it worth it, and how quickly it will get there and how long it will stay there for is anyone's guess. Decisions, Decisions. 

The 5yr isnt much more actually but my partner is dead against 5yrs so no can do. 

Nailer99

These are very competitive rates. Can I ask who your lender is?

Snookie12cat

Nailer99 said:

These are very competitive rates. Can I ask who your lender is?

This is existing customers only at Skipton.