Moving home, Fixed or Tracker

angela2095

Hi, I currently have a tracker with Halifax for £17000. My new mortgage will be for £40000. I've been into the Halifax today and she advised me to go for a fixed rate of 4.99% for 2 years with an arrangement fee of £499. The new payment of £236 per month sounds ok to me but would I be better off with another tracker. Advice needed as we are totally stuck as to what to do. Thankyou, Angela.

Mortgageman

There are two questions here

1) Is the fixed rate any good -
to which I think the answer is probably "no, it's not the best" - It's alright, but you can do much better (that £499 fee is high, and if it is the product I'm thinking of you don't get help with costs) - Are there any pens on the £17,000?

2) Do I want a fixed rate or a Discount (Tracker)?
Trackers are cheaper (normally), but there is an element of risk (your payment can go up / down with interest rate moves) - Fixed rates are more expensive because you have stability - only you can decide really

HTH

MM

Robert_Sterling_3

Fixed rates are at present higher than tracker rates on day one.
Which is the more expensive in the long run we do not know.
It depends on how the cookie crumbles.

payless

Some advisers / clients like fixed rates as it gives security to clients, but with the fee being over 1% of loan , and the fix being only 2 yrs , not sure if numbers add up here to justify it. If you want a fix- can't you find a product with a lower fee - albeit likely slightly higher rate

Mortgageman

Fixed rates are at present higher than tracker rates on day one.
Which is the more expensive in the long run we do not know.
It depends on how the cookie crumbles.

Yeah, sorry I probably wasn't implicit enough about that - if the lenders economist has done their job properly the two should cost out as equal - they rarely do, but that's the theory.

angela2095

Hi again, Thanks for the replys. Halifax told me there are no penalties if I change to another building society etc, however, when I told her I might shop around she also said that Halifax would refund the values fee of £265 on completion of my move. She also said that with this mortgage there would be no penalties to pay if I decide to change over after my 2 years is up.
Because we are used to having such a small mortgage we are really looking to keeping our payments as low as possible. Thanks Angela.