Confused with what to get....HSBC 4.33 2 Year Fix or 4.72 Tracker, why are trackers not budging

IAMIAM

I complete in a month on a 75% LTV remortgage, but with the fix now being 4.33% from Monday.....should I move to a fix? The tracker hasn't moved at all in months.

Does this mean base rate will drop from 4.5% (after another probable increase) to something that will make the tracker less than the fix, which is why banks are not changing trackers?

housebuyer143

Because trackers are so low they can't reduce them anymore. Some are 0.24% above base. They can't reduce them to 0% can they.

IAMIAM

But….will the base rate get to a point where the 4.72 (0.47 above base) will become around 4.33 (two year fix) over the next 18 months - when I secure my next product….

housebuyer143

If anyone could tell you that they would be rich. I am taking that risk and riding a tracker at 0.39% above base (no fees). 
Will find out in a year if it was a good idea I suppose 😂

IAMIAM

If BOE again increases to 4.5% in May, the tracker will become 4.97 whereas the fixed rate at 4.33 will remain. Can the BOE realistically reduce the BOE back down before the two year term is up? As in effect, I will be rate switching again in 18 months if rates are cheaper by then anyway...

Am I also right in thinking the ERC on HSBC in year two will be 1% minus 10% overpayment allowance, reducing down, so say in 12months, if rates are great, I can pick a product and only pay a fee covering six month...

June 2023 Remortgage Commences
June 2024 All new rates are suddenly great
June 2024, pick a product switch rate for maybe January 2025 completion.
Pay ERC for January 2025 to June 2025 only....is this plausible

Trying to convince my self to now ditch the tracker offer and pick the 2 year fix...