Should I ditch Lifetime Tracker for a 5yr Fixed Rate
Options
allisond
Posts: 28 Forumite
Hi
My husband and I have a lifetime tracker mortgage, which started at a rate of 1.49% then increased to 1.74% last September when BofE increased .25%. We still have about 10years left before we pay off the mortgage, possibly sooner.
We don't plan on moving over the next 5 years, so we are wondering whether we would be better off getting a 5year fixed rate. Especially as the BofE is likely to increase very shortly. If it does then the rate of 1.99% would match the lowest 5yr fixed rate that we have seen, presuming it's still available!
As if the rates increase again over the next 5yrs which I suspect they will, then we'll be paying more on the tracker than the fixed.
Previously we have always benefitted by being on a tracker.
Any advice on whether we should keep the tracker or move to a fixed rate would be appreciated.
Many thanks
Ally
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Comments
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Morning Ally
You are facing the same dilemma as a mountain of people currently remortgaging at present, as to whether the recent economic uncertainty should sway you into fixing for a longer period.
This is purely down to your attitude to risk and preference for long-term stability over short-term flexibility. If you feel that in the next 5 years, nothing much will change, then yes, a long term fixed rate is a viable option. However, do remember, you will generally be tying yourself up for that period of time and this does mean if you want to upsize / downsize etc you may have to port your rate (at the discretion of your lender) or be liable for a hefty early repayment charge. There are lenders and rates out there that have more flexible options, ie 5 Year Fixed with no early repayment charges, however, these are generally a higher interest rate than fixed rates with charges.
A good broker would present your options and discuss what is most important for you from a rate, before reviewing the market to find a viable option for you.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 advice0 -
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The Bank of England’s Monetary Policy Committee, at its meeting ending on 13 September 2017, the MPC voted by a majority of 7-2 to maintain Bank Rate at 0.25%.0
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I've never had a tracker mortgage always a fixed rate.
Personally, our 2 year fix ends in March and I'm wanting to do a 5 year fix.0 -
Yes sorry that was a mistake Lucky Duck....I was meaning to say that it is 1.49% + BofE rate of .25% making it 1.74%0
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Thanks everyone for your comments, we don't mind risk and in light of what sevenhills has said - which I wasn't aware of - thank you.....we have decided to remain with our tracker.
Thank you.
Ally:)0 -
Ally
You are aware they meet every month right?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 advice0
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