Remortgaging - tracker or fixed?

[newtothis15]

We need to remortgage end of fdbruary

45 percent LTV -

Remortgaging - tracker or fixed?

Also in June need to pay off 7000 crediit card, in september 9,000 credit card

Shall i release money now when remortgaging or nearer the time of credit cards deadline to get a personal loan?

Can you add your credit card bills to your mortgage when you remortgage? That’s what we did a few years ago when our credit card bills had got a bit out of control. It makes repayments a lot easier because mortgage rates are so much lower than credit card rates.

Personally I would probably go for a tracker at the moment as long as you can find one with no set up fees or penalties for ending it. Then switch to a fixed rate mortgage when mortgage rates fall which they are predicted to do this year.

Fixed 3 years

I can add credit cards to mortgage but they are on 0 percent until une/ august so adding them end of february to mortgage might just be more costly?

Is it better in june and august to apply for personal loan to pay credit cards off?

The trouble with leaving the credit cards until June/August is that you will have missed the window by then of adding them to your mortgage while remortgaging in February. Unless you allow your mortgage to revert to the standard variable rate until the summer & remortgage at that point. Though that might work out more expensive, I don’t know.

I would ask your current lender to give you some examples of how much the repayments would be on a tracker, fixed rate & variable rate mortgage both with and without the extra 16k of credit card debt.

Also you need to research how much interest personal loan companies are charging right now. Normally they charge more than people pay on mortgage debt but less than they pay on credit card debt. Unless you can switch to another 0% credit card in the summer.

Worst thing you can do is this op. I'd get a Tracker.. rates are coming down now and will likely come down as fast as the went up.. worst thing to do is get a fixed rate now at the highs and be locked in for 3-5 yrs. Yes, it might be a squeeze for c. 6 or so months before the cuts start but you will save money in the medium term. Tracker now, then fix it at the lows

Not 5 years . 3 years if you can get it if not then 2.

I agree with the others saying no to fixing for 5 years. They will be slightly cheaper than 2 year fixed rates but rates are slowly falling so you don’t want to be locked into a long deal.

I do fixed because I like the certainty of knowing what I have to pay each month. My anxiety couldn’t handle tracker 😆

My anxiety couldn’t handle fixing for 5 years and watching rates falling for 5 years but we’re all different.

I know 16k of CC debt is a lot to pay back but if you haven't got it - but could you not put a plan in place to pay it off by September? That's nine months away ?
I'm cringing for you at the thought of adding it to long term debt via mortgage - whilst rates are probably at the highest point they will be for some time and house prices are falling.
If it were me I'd be doing everything possible to clear the CC cards without adding them to a mortgage. OK it makes your monthly payments more manageable - but in reality that debt is really expensive over the term of your mortgage..

I just did the sums - if you add 16k to a 20 year mortgage at 4.7% then you end up paying a whopping 25.5k back on it !!

But mortgages can be overpaid to drastically reduce the term especially if no longer servicing expensive credit card debt ( appreciate it’s currently 0% interest but won’t always be).

It definitely worked for us to consolidate our credit card debt with our mortgage when we remortgaged but appreciate of course that everyone’s financial situation is different. The main thing for @newtothis15 is to somehow lose that credit card debt before the rate goes back to normal whether by transferring it to a mortgage or personal loan or by paying it off as aggressively as they can. However I doubt it’s as simple as just paying it off unfortunately.

Your absolutely right. But given that the op has built up 16k of CC that they can't pay. Plus having to remortgage at probably significantly higher rates, it does seem there is a risk that it will be added to the mortgage over a longer term and become an expensive debt rather than the current interest free deal. I totally get that it's clearly not as simple as just paying it off. I'm just pointing out the real world cost if the OP does this and is unable to rapidly overpay on the mortgage.

I think rates will start to come down BUT I don't think we should assume rates around 1% or lower will be the norm again in the near future.

Personally I wouldn't add credit card debt to mortgage because you will be paying for it forever and also you are effectively changing unsecured debt into a debt against your home.

Tracker probably makes sense at the moment but there will always be a risk that rates go back up again (or at least stay high).

Fair enough

I think rates will start to come down BUT I don't think we should assume rates around 1% or lower will be the norm again in the near future.

I agree

I agree it seems unlikely that rates will get as low as 1% let alone lower. I believe the Bank of England base rate could fall to around 4% by the end of 2024 and 3% by 2025 but I'm not expecting ultra low mortgage rates again for the foreseeable future.

Tracker does seem to make sense for someone forced to remortgage in February. I would be looking for one with no redemption penalty even if the rate was slightly higher to ensure flexibility to possibly switch to a 2 year fixed rate mortgage once they become cheaper.

@newoldfluff either/or 2/3 yrs I still think it's too long to be locked into the highs. It's a tale as old as time that when the BofE pauses rate hikes (which they just did) they are going to start coming down thick and fast. Expect the first cut in IRs by the end of the 1st quarter this year.. that's my prediction