Tracker mortgage??

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Would you risk a tracker mortgage in this market? Currently firming up our mortgage options and our broker has found a pretty competitive 2 year tracker option.
Fixed 2/3/5 year would all be at 2.75% 2 year tracker is starting at 2.2%.
Starts at nearly £100 less a month.

For interest, we have a combined income of juts over £100k, mortgage needed is £385k. Both our jobs are very secure.
what type of mortgage would you plump for? Our broker doesn’t want to sway us either way!

Eh? What? Of course a tracker mortgage is a thing - when your fixed rate ends, what do you think happens?

I've been on a tracker for 15 years, it suits me & I've benefited in low interest rate times so it will work out over the term of my mortgage.

Brokers are not necessarily advisers - and advisers won't tell you what to do anyway. An adviser would say, you've told me that you would struggle to cope if payments went up & like to be able to budget each month, so I recommend fixing - or, I can see that you could afford it if rates went up by x% and you've told me you would be happy with that risk so I recommend a tracker as being the cheapest available today. Those are the questions you should be asking yourself - if rates go up can I afford it, how would I feel about a higher payment etc.

No-one can predict the future - all you can do is think about how you might feel in different scenarios & choose the one that you feel most comfortable with.

I'd go 5 years if it's the same rate as 3 and you've no plans to move int he short term.
I always recommend based on circumstances of the applicant.

For myself I've fixed for another 2 years recently but I'll probably sell in 2 years time and don't want to be stuck with a lender or charges x

I’d be tempted to fix for 5, but it’s hard to say. 2.74% is not a very good rate compared to a year ago, but it’s a not unreasonable rate compared to say 10 years ago. You need to make a decision on whether you think the base rate is going to be higher or lower than it is currently in 3 years time. If you think it’s going up then fix for longer, if you think it will come back down by then then you should take the 3 years. The reality is that none of us knows, and we are making a bet when we take a mortgage product. But probably a 5 year fix is better because if the base rate in 3 years from now is much higher your new mortgage at that point will be expensive.

I had a 2 year fixed rate 5.50% (our something ridiculous!) from March 2008 when I first bought and watch interest rates plummet whilst I was stuck paying hundreds a month extra (really bad advice from my broker!). I always said I'd never again do a fixed rate mortgage, ever!

Last month I went to a 5 year fixed rate deal whilst I could still get a good rate, our mortgage payment went down as that was slightly cheaper than our tracker had been. 1 week later interest rate went up again so we are definitely winning!

I would not risk a tracker at the moment unless I had no choice or I was planning to sell within next few years.

I’d fix, most likely for 5 years.

mortgage brokers are regulated the same as banks. In fact we usually have to supply more compliance than what the lenders ask for.

we also have access to the entire mortgage market, not just one set of products.

I think the base rate by the end of next year will hit around 4%. And then come back and settle around 1 after a couple of years. So 5 years should cover your bases. You’re looking at trackers (lowest I’ve seen is .89 above base) so you be paying 5+ % potentially.

Are you expecting any major life events in the next five years such as having a child? If so, I'd fix.
You don't want to be trying to remortgage on a potentially lower income in three years when banks may well have tightened up their lending criteria due to higher interest rates.

Of course rates could come down again but I don't think it's that likely they'll drop much below where they are now. There's a lot to be said for security (and I say that as someone with a tracker but it's small and we can pay it off if it's worth it)

I meant fix for five years. Realise I missed an important part of the sentence!

We had a tracker at 0.19 above base. It was so cheap that I let it run full term. It saved us thousands.

I would be looking for a fix if I needed to remortgage tomorrow.

How does Porting work? and does it influence the tracker/fixed decision? I read that even if your bank allows porting to a new property you need to make a new application and are due Early charges in any case?

Seems porting is not as beneficial as first seems?

Also for a new property it is better tofix for a longer term eg 5 years as affordabilty is more transparent as you know what you need to pay for the term fix?

I believe if porting they will reassess affordability

I’ve a friend who was really stung several years ago by a tracker. Id fix

Given interests have been quite low for a decade or so , the friend was stung in the 90s? Was it simply rates kept on going up?

Exactly that - rates climbed in the late 90s. We were stung by it too.

Martin Lewis said to fix for five years on his money show last night. Seems the general consensus.

No big changes planned. We’re both happily settled in our careers and have no plans for a baby (we have three of those already) Fixing seems the sensible option.