My 1.23% tracker!

Options
Paton147
Paton147 Posts: 61 Forumite
in Mortgages & endowments
What would you guys do if you were in my situation!

House is worth 200k with 133k mortgage. 70K is a tracker 1.23% above BoE, so therefore 1.98%, 63k can be fixed at 1.69% for two years if I stay with TSB. Their 5 year fix is a pretty rubbish rate of 2.29% compared with 1.85% elsewhere for 5 years (but I moving I’d lose the 1.23% above BoE tracker for life).

I’m 35 and happy to stick with the 25 year term. My wife and I ultimately want to trade up to something around 260-280k in the next 3 or 4 years. Our after tax take home is about £3000 (with my wife currently part time as we have a toddler).

I just can’t make up my mind about leaving TSB and getting at better fixed rate! Possibly even a 10 year fix!! Or do I fix for 2 years with an aim to hit 60% LTV by the time that ends?

Comments

  • YHM
    YHM Posts: 650 Forumite
    Options
    Why are you restricting yourself to just staying with TSB. Their rates aren't competitive at present....
    I am a Mortgage Broker.

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice
  • Paton147
    Paton147 Posts: 61 Forumite
    Options
    Because of the tracker. I just wondered with the BoE rising, maybe the tracker isn’t that great anymore.

    I’m tempted to do a 5 year Santander fix at 1.85%.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    Options
    Focus on the potential move that drives the decision making process short term.

    If you fix for 5+ you are either moving later or looking at porting/ERC.

    Your short term LTV is 66.5% can you do anything about that now?

    When you move you are going to be around(say in 4 years) £116k on the mortgage equity will be £84k on a new 27k place £270k around 69% LTV depending on price movements and how much you have saved for costs.

    The tracker is worth thinking about keeping but when you move the ratio changes making it less important.

    You are currently £70k+£63k after the move it will be £60k+£126k dependant on TSB letting you port and decent rate on the extra borrowing.

    What is your overpayment situation?
    Does TSB allow you to overpay all the ERC free payment on the fixed bit or do you have to do each bit separately.

    Any reason you can't trade up now?
  • Paton147
    Paton147 Posts: 61 Forumite
    Options
    We would love to move now but there is so little on the market. We have a Victorian house and the next place has to be a similar age. As Scottish prices are still relatively low, I suspect FTB couples are snapping up lots of the period homes as they are sold within days.

    The 3 or 4 year plan is to hopefully have another baby and save the fees for a house move.

    I looked at how a higher valuation and a potentially money transfer from a CC could get us below the 60% LTV but the change in interest rate was so minimal I didn’t think it was worth it.

    I though regardless of the term I fixed or if I moved, the lender would be similar to TSB whom have already indicated they would lend us another £80k if we moved house.

    If we fix for 5 years with Santander, would it not just be a case of borrowing the extra at whatever deals they have further down the line?
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608.1K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards