Mortgage: Tracker or Fixed

pallys

pallys

pallys

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Dnt know what to go for...Trackers seem good...but then I consider a fixed rate for 10 years and then re-mortgage after the fixed period because I think the base interest rates will go up

currently seen offers for 5.18% fixed for 10 years.

or lifetime trackers with base rate +0.25%

dno which to choose, what do you guys think? :confused:
 
Personally I've gone with a 2 year fixed and see how it goes from there, 10 years fixed is a long tie in period.
 
If the rate is good (and 5.13% is pretty good, especially given base is currently 4.75 and expected to rise) then 10 years fixed is pretty good. You could look around for capped, rather than fixed, but you'll be lucky to find capped for that long.

We took 5 years fixed at 5.29% last spring when we bought (a bit higher but it was 100%) and the security that brings in these potentially turbulent times is great. I would take 5.13% fixed for 10 if someone offered it to me now.
 
I would go with fixed. you now how much you will be paying every month, so regardless of the economy you can pay it back. Maybe a 5year one though. But I would get one with a no redemption (that's not the word I'm looking for). Where you don't get charged for paying it off early. Then try to pay a bit more every month as, and when you can afford it. Paying capital of in the first few years saves you so much money in the long run.
 
The selection of your mortgage is a difficult process and requires more then just one question.

Please seek independant mortgage advice, I'm currently training to be a mortgage advisor they're are many other questions you should be asking rather then just fixed or tracker.

Going to your bank and asking them for a mortgage isn't how you should be playing this game, go to an independant advisor and find the best product on the market for you.

In the meantime here are some questions you should be prepared to answer:

1) How long do you intend to keep the property for?
2) How much of the value of the property do you want to borrow? (Know as LTV)
3) Do you want an interset only or repayment basic?

And many many more questions. Any good advisor should try to build a clear picture of your financial circumstances and work from there.
 
^^

good advice, I know we don't plan to me there more than a couple of years so taking a lower rate for a shorter fixed term is the better option for us.
 
Ev0 said:
^^

good advice, I know we don't plan to me there more than a couple of years so taking a lower rate for a shorter fixed term is the better option for us.
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You also dont want an overhang or tiein and depending on your circumstancies probaly want intrest only instead of repayment.

There are some many different products on the market and they all have they're own niches, see an advisor they may charge you for there time but it will be money well spent.
 
Gideon Moss said:
You also dont want an overhang or tiein and depending on your circumstancies probaly want intrest only instead of repayment.

There are some many different products on the market and they all have they're own niches, see an advisor they may charge you for there time but it will be money well spent.
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Aye I don't see the point of repayment for a first place where you'r eonly there a few years.

You pay back pitance of the actual capital, you'd have/make more cash by putting the difference between the full and interest only mortgages (say around 200-250) in the bank each month. I think the first few years on your mortgage on a full repayment you pay less than 1k of the capital back in the first few years, but if you put the difference in mortgage cost in the bank you get about 2500 a year.
 
Ev0 said:
You pay back pitance of the actual capital, you'd have/make more cash by putting the difference between the full and interest only mortgages (say around 200-250) in the bank each month. I think the first few years on your mortgage on a full repayment you pay less than 1k of the capital back in the first few years, but if you put the difference in mortgage cost in the bank you get about 2500 a year.
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Correct however with a portable product from the correct lender you could keep the mortgage when you move house. This however isn't a simple product.
 
In January, I went with a 4.94% fixed for 5yr deal. This way I know exactly how much I would need to pay per month for the next 4.5yrs and dont have to worry about rising interest rates during this time. I also have the option to overpay by upto £500 per month which is a great way of paying off the mortgage early.

If you are happy to have a fixed rate for 10yrs, then 5.18% sounds reasonable. You also have to consider the duration for which you will be in the property for.
 
rabanthor said:
Few months ago we went for fixed rate 10 years (4.89%). Depends how you feel, I feel more comfortable knowing thats it sorted for 10 years.
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Agreed, it was about the peace of mind, we got 4.99% for 15 years with the option to change to a different mortgage product after 3 if we wished.
 
YoungBlood said:
Agreed, it was about the peace of mind, we got 4.99% for 15 years with the option to change to a different mortgage product after 3 if we wished.
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That sounds pretty good! :)
 
YoungBlood said:
Agreed, it was about the peace of mind, we got 4.99% for 15 years with the option to change to a different mortgage product after 3 if we wished.
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Thats a very nice deal you got there. Who is your mortage with?
 
I have one on a tracker and one on a discount, unless you desperatley need stability the generally a fixed rate will cost more in the long run

the +.25% tracker doesn't sound that great, the one I have is at +0.09% for the full term
 
Dolph said:
If the rate is good (and 5.13% is pretty good, especially given base is currently 4.75 and expected to rise) then 10 years fixed is pretty good. You could look around for capped, rather than fixed, but you'll be lucky to find capped for that long.
I would take 5.13% fixed for 10 if someone offered it to me now.
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Same here.
 
Well i've had a mortgage for quite a while through interest rate rises and falls and prices crashes and rises and my opinion is to go for a discount with if possible no tie ins and dont be afraid to switch (make sure they pay the fees etc)

My favourite at the moment is an offset mortgage, forget interest only, you need to get that debt down and the sooner you start the better.

Dont forget, the mortgage is real money and one day you'll want to pay it off.

But in the mean time you could end up paying at least twice what you borrowed and thats real money from your pocket.

lecture over
 
Rotty said:
I have one on a tracker and one on a discount, unless you desperatley need stability the generally a fixed rate will cost more in the long run

the +.25% tracker doesn't sound that great, the one I have is at +0.09% for the full term
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wow who is this with ?
 
Same as Slam62, I have an offset mortgage, by Christmas I should be paying the bank £0.00 in interest per month, so changes in intrest rates will no longer matter.

I have had a repayment mortgage for twelve years and an offset one for a year now.

Get it paid ASAP.
 
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