Fix to avoid higher LTV?

RedFraggle

Debating a fix.  Currently on a tracker at 1.09 above BoE until Dec 24. 
No fees (ERC or product)
Predominant concern is any drop in the current value of the flat (235k) pushes me out of the 90% bracket. 
Can get 2 years at 5.54% or 5 at 5.14%.
Having had a mortgage at 10% in the 90s and then paying around 6 to 7% for several years I'm more convinced house prices will drop than mortgage rates. 
Thoughts?

Sarah1Mitty2

RedFraggle said:

Debating a fix.  Currently on a tracker at 1.09 above BoE until Dec 24. 
No fees (ERC or product)
Predominant concern is any drop in the current value of the flat (235k) pushes me out of the 90% bracket. 
Can get 2 years at 5.54% or 5 at 5.14%.
Having had a mortgage at 10% in the 90s and then paying around 6 to 7% for several years I'm more convinced house prices will drop than mortgage rates. 
Thoughts?

I think you are right. 5 at 5.14 sounds like the way to go.

housebuyer143

RedFraggle said:

Debating a fix.  Currently on a tracker at 1.09 above BoE until Dec 24. 
No fees (ERC or product)
Predominant concern is any drop in the current value of the flat (235k) pushes me out of the 90% bracket. 
Can get 2 years at 5.54% or 5 at 5.14%.
Having had a mortgage at 10% in the 90s and then paying around 6 to 7% for several years I'm more convinced house prices will drop than mortgage rates. 
Thoughts?

Are there no better trackers? I'm not convinced fixing for 5yrs at over 5% is a good move, but who knows. 
I am riding a 0.39% above base and will see how it goes I suppose. 

RedFraggle

No there are not

simon_or

If you're convinced that rates won't drop significantly but property prices will (at least in the near term) then a 5 year (or even longer) fix is what I would go for.

If you think you can overpay significantly in the next couple of years so that the LTV isn't a worry anymore then a 2 year fix comes into the picture.

dimbo61

Debt is debt and kicking the ball down the road won't make it go away.
Overpay as much as possible 

RedFraggle

Can you clarify why this might be kicking the ball down the road? I'm not intending to extend the term and I already overpay. It's the house price drop concern that worries me as it could stop me being able to secure a fix in future and I don't want to end up stuck in an SVR. 

Herzlos

Prices won't drop significantly for long, so you'll probably be fine for having to remortgage with a lower equity.

At a 4.5% base rate that's not going to go down any time soon then either of those fixed rates will save you money. Put that saved money into overpayments and that'll decrease your LTV away from the 90% threshold.

2 or 5 years will depend on where you feel the base rate will be in 3 years time, but the 0.5% base rate was an anomaly we're unlikely to go back to.