Fixed or SVR?

4$£&*(£$&*(!

I owe £25k on my mortgage and want to pay it off in about 2 years time. My bank's SVR is 7.24% right now which I'll be going on in the next couple of months when my fixed deal ends. The bank will offer me a new fixed deal for 2 years at 6.09% but they want £500 as an arrangement fee.

So here's the predicament. I personally can't see interest rates going haywire over the next 2 years but of course there's the credit crunch. If I stay on the SVR I'll be paying about £320 over the 2 years extra over the fixed rate. However the fixed rate costs £500 so if rates stay at today's value I'll have actually saved £180.

There's no point me switching providers as on such a small mortgage it'll cost me more in exit fees from my bank and arrangement fees on a new deal.

What would others do in my position?

Thanks.

KiKi

You've answered your own question, really...it will cost more to change to fixed, so why not just stay with the SVR. Yes, it's high, but if all other options are more expensive then I'd stay where you are.

KiKi

cooper2110

Are there no other deals with NO arrangement fees with your current lender? Most tend to do "no fee options" which are somewhere between the two rates you've mentioned. Even if it means going for a tracker, I wouldn't be too concerned at that level as any interest rate rise may cost you an extra quid!

4$£&*(£$&*(!

Some good points there, thanks. I'm with Principality who I have to admit haven't appeared particularly helpful in deciding my options right now, and given the credit situation going on I just can't see me bagging a fabulous deal with such a small amount outstanding.

_Andy_

Have a look at the Nationwide SVR - no ERCs, no fees aside from £90 exit fee.

sarkin

Ask your current lender for a fee free deal

_Andy_

Free legals and free vals on Nationwide SVR.

aah

no fees, vals or legals on HSBC lifetime tracker, 0.74 above boe base rate. thats 5.74 currently.

MarkyMarkD

_Andy_ wrote: »

Free legals and free vals on Nationwide SVR.

Huge apologies, Andy. I didn't think anyone did incentives on SVR products - more fool Nationwide, I suppose.

(Original post deleted as it wasn't adding anything helpful).

owitemisermusa

aah wrote: »

no fees, vals or legals on HSBC lifetime tracker, 0.74 above boe base rate. thats 5.74 currently.

Standard Offer - Life Time Tracker
Effective Date - 14.04.08
Booking Fee - Nil
Rate % - 5.99%
Bank of England Base Rate - Base Rate + 0.99% for term
Overall cost for Comparison - 6.2% APR


Things are changing rapidly I'm afraid. As usual, banks aren't keen to pass on the rate cuts!

Man, things are a wee bit crazy!