fixed rate v base rate tracker mortgage

[bringmeashrubbery]

Anyone have any views ? We are due to remortgage shortly and would like to decide th best option.

tia

views in what respect? are you asking if we thik rates will go up?

basically, if you want to be able to stick to a budget go with fixed rate, then you know exactly where you are. but then of course if rates go down you might be paying over the odds.

or if you feel comfortable riding the rates then go with the tracker. but then of course if rates go sky high, you may find your repayments unaffordable. if you did go with this option, maybe look at what the repayment penalty would be if you did switch to move to a better rate.

we had this debate recently and went for the fee free tracker, the main reason was it would have taken more than a 1% interest rate rise over the 3 years of the fixed rate to actually make a difference. The fixed rate interest rate was also higher than the tracker, so we would have been paying more monthly. What i mean was that the fee for the fixed rate was £700 and for every 1/4% interest rate rise it only makes a £7 a month difference to our mortgage, but then we only have a small mortgage and 12 years left.

Its worth looking at all the maths involved.

I am not asking if rates will go up. Just about the specific products and their pros and cons. katzg we a rethinking a base rate tracker would be cheaper in the long term as you have to pay for fixed rates. I'ts whether we can afford to ride the rates, which are most likely to go up short term at least, but probalby not sky high.

i'd say price up both and then get calc how much a 1/4 1/2 and 1% increase would mean to you in monthly terms and do the maths!

maybe put the money that you would have spent on a fixed rate arrangement fee into an account to cover any interest rate rises

best bet is too talk to an IFA or go into your bank. We went to the nationwide where they were very good and she calculated all of the various rate rises for us

katzg - thanks for your useful advice. Will certainly do the calcs as I would prefer a tracker long term although money a bit tight at the moment (will change hopefully in next few years). We have a good IFA who we used for our last mortgage so hopefully he can help us out.

i have to say though that with the 2 interest rate rises since we took ours out we were a bit concerned that we didn't take the fixed but our interest rate now is the same of the fixed we were offered and so were still the arrangment fee up at the mo!

arrangement fees are apparently v high now compared to even 3 years ago when we took our current mortgage. This is what the IFA has pointed out.

Can I ask, is your tracker portable (ie can you take it if you move house)?

nope i don't think so. We have got a lifetime tracker which we are tied to for 5 years, can't rememeber what the % is but it decreases each year

we have a big mortgage so half of it is on a tracker and half on a fix. You have to pay two arrangement fees, but you're less exposed to making a bad call - whether this is worth it for you will depend on how large the mortgage is

Talk to a broker like London and COunty. They will take their fee from commission if they sell you something, and they sometimes have access to much better deals than those available on the web/ highstreet.

Depends on your personality. When we got the mortgage on our house, we went for a 7 year fixed rate, because the most important thing to us was to have consistent payments, rather than being exposed to interest fluctuations. If we ended up paying a bit more as a result, that didn't bother us.