Remortgaging in December - what would you do

[bumposaurus]

Have a fairly enormous loan which comes off its current fixed rate in December. Have been offered a new fixed rate mortgage (5.69%) which is manageable from a budgeting perspective. However, I have also been offered a tracker rate and I know there is a suggestion that interest rates will go down, so what would you do?

We just fixed.
Too much uncertainty and we are on 1 income until my business makes money, so we needed the certainty.
The fixed rate was the same for 2/3/5 yrs, so maybe go for 2yrs?
We just couldn't afford to gamble.

Am in exactly the same situation, we've been offered 5.63 for five years so am keen to see what others think too.

What is the tracker rate though - base rate + what?

Oh, and what are the fees for the different mortgages?

Sorry - should have put that - plus.53% for the first two years and fees are £1500 for the fixed and £2000 for the tracker

I don't know how big your mortgage is, but you need to work out how much your payments would need to come down by to make up for the £500 difference in fees.

I think interest rates will almost certainly come down by at least 0.5% over the next year, possibly more, but I wouldn't like to say after that. It's also uncertain as to when they will start coming down.

Thanks - think I will go for the fixed as I need the certainty of knowing what it will be!

yes agree with daisy.. looking likely that the BOE base rate is predicted to drop by 0.25-0.5% next week and in the next 2 years i wouldn't be suprised if it drops to 4% or even lower (gradually) to help the economy recover.... so for a 2 year tracker loan it wouldn't be a bad thing, fixed then it could be a problem!

where is that crystal ball???!!

i remember only a few years ago interest rates where really really low around 3-4% and that's when the economy got strong!!

anyway a woman on the phone at rbs let slip that mortgage rates where changing next week....... and i would guess it's going up!!

you can fix a new rate up to 3 months before your mortgage rate ends.

anyway, who knows! good luck

talking about fixing, anyone fixing their gas/electricity supplier prices??

we have fixed for 3 years at 5.89 %.

although we felt that interests rate likely to come down, if they went up , we would find it tough and as the economy is in freefall at the mo, we wanted the certainty of a fixed rate with a stable provider. we organised it in june and completed this week. am gald we did as last week , loads of mortgage deals were off the market.

fixed rate is a bit of a kicker when rates come down, but you do get certainty of what your outgoings are

have fixed gas and electricity a few months ago, paying a fortune anyway!

Does a tracker track the Bank of England rates ot the lender's rates?

Interest rates may be coming down, but the Libor rate is going up...isn't that waht mortgage rates are based on?

you should check that your tracker tracks the BoE base rate, not all do...

yes, bank mortgage rates look to increase due to the interbank lending rates increasing which is different to the BoE base rate, as lulumama says lots of mortgage deals are now coming off the market as banks are reluctant to lend...

the base rate may desrease a little in the short term to pacify everyone but the mortgage rates are set to rise

Our fixed rate mortgage has just ended and DP has opted for a Tracker mortgage for 3 years. He is confident mortgage rates will come down and BOE will cut rates next week, so this was the one for us.
In the Sunday Times there is always a page of Best, mortgages, saving accounts, Isas etc so that might be worth looking at.
Good luck.

We hummed and haahed for ages in January about whether to go for a tracker which at the time was a little more expensive than the fixed rate we were offered - am very glad now that opted for a tracker, especially as it is a lifetime deal and had no fees at all. Couldn't get anything like it now