Do you only go for a tracker mortgage if you think IR are going to fall?

Gorgeous_George

I think rates are unlikely to reach 15% again in my lifetime. The millions being repossesed would cause a meltdown so massive that, IMHO, it just won't happen. Boring interest rates of 3% to 9% are all that I can imagine for the next 30 years.

With a low LTV, two reasonable wages coming in and other income, I am confident that I can weather any storm that the government dare put my way. If I'm in the excrement, I'll be in good company (?)

GG

Dan_Collins_2

If u are borrowing less than 90% ltv and you want stability then that deal is very very good. If u can afford an increase in your payments but want to gain from ir drops then a tracker may suit. If I was not tied in I would be going for a 5 year fix. You can ride out any rocky times.

Gorgeous_George

Dan_Collins wrote: »

If I was not tied in I would be going for a 5 year fix. You can ride out any rocky times.

Only if times are not rocky/rockier in 5 years.

GG

Jonbvn

The benefits of a tracker IMHO:

1. Ability to overpay every month and with lump sums.
2. Not necessary to remortgage every few years with the fees required etc. You fixed rate guys have to pay for your peace of mind.
3. No rude awakening at the end of a fixed/discount rate period. Increases and/or decreases are likely to be more gradual (OK! unless we go back to ERM)

herbiesjp

Jonbvn wrote: »

The benefits of a tracker IMHO:

1. Ability to overpay every month and with lump sums.
2. Not necessary to remortgage every few years with the fees required etc. You fixed rate guys have to pay for your peace of mind.
3. No rude awakening at the end of a fixed/discount rate period. Increases and/or decreases are likely to be more gradual (OK! unless we go back to ERM)

Hi Jon

Correct me if I am wrong, but I think you mean

1) ability for unlimited overpayments
2) no need to re-mortgage
3) No rude awakening

But these would only apply to lifetime trackers as opposed to trackers as a whole

You can get trackers for an initial period of time i.e. 2 years etc, during which overpayments can be made but can be limited (like fixed rates). If you do go for one of these shorter deals, then you will potentially have to re-mortgage again onto a better deal and you could have the payment shock back up to the lender's SVR

:beer:

michaels

All things being equal a fix will be slightly more expensive than a tracker as the banks are charging a fee for the 'certainty' However over any individual 2/5 yr period either might work out better depending on how rates move compared to what the market was predicting

chappers

Tracyk wrote: »

As I mentioned in another thread yesterday - I remember well when the rate hit 15%. I don't fancy that again. I guess I'm too much of a scaredy cat to take the chance - I'm gonna go fixed rate for peace of mind.

If that worries you then take a tracker with no redemption penalties, then if things start getting a bit hot for you you can always switch to a fixed rate then.

Jonbvn

herbiesjp wrote: »

Hi Jon

Correct me if I am wrong, but I think you mean

1) ability for unlimited overpayments
2) no need to re-mortgage
3) No rude awakening

But these would only apply to lifetime trackers as opposed to trackers as a whole

Of course you are correct.