Downwards trend for Base Rate

saajan_12

bootybounty12 said:

If anyone has a crystal ball would love to know. But I've literally found nothing to suggest rates will go up?! Obviously global crisis etc. not accounted for. 

The thing is the bank offering the fixed rate also knows the predictions base rate trends, and account for this when pitching the fixed rate. So in theory, the saving in the first few months offsets the extra paid in the last few months of a fixed rate vs a tracker which starts higher and likely ends lower. 

Eg 2y fixed rate = 5% and they're assuming a tracker would be 6% for the first year and 4% for the second year, so you end up the same. (puroposely used incorrect numbers as its just for illustration, not what I acutally predict). 

People may not think rates will go up, but if they don't fall as fast as you're expecting or if there is indeed another crisis.. a tracker MAY end up better, but its not as slam dunk as you're saying. Professionals are saying they're about even. 

bootybounty12 said:

I should have said, going through a divorce, there's quite a high chance we will need to sell up and exit this mortgage during the term. ERC on the tracker is obviously much less than the fixed which is another very appealing option, combined with the downward trend of base rate falling.

However the flexibility v certainty is going to be much more relevant to individuals.. some prefer the flexibility of no ERCs to pay off early, some prefer the certainty of knowing their monthly bills for longer. Banks can't model and optimise for this, while you know your circumstances better. 

So the above quote would be the sole reason I'd go for a tracker in your shoes.