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Mortgage deal about to expire-what to do?

Shankley

By Shankley
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Shankley

Shankley

Posted
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My current mortgage deal expires in June. Currently have a fixed 1.45 pc off the banks standard variable so paying about 2.39pc at mo. I have a loan to value of about 50pc so am able to get most of the deals on offer- I just don't know which is best, fixed (say 3-5 yr) or going on a tracker. Best 5yr I've found is over 5pc and best tracker rate is 2.49.

Such a difference in rates that equates to about ?250 a month more going on the fixed deal. I appreciate the arguments for fixed- able to budget, piece of mind etc but I'm fortunate enough at the moment to be able to make overpayments on my current deal as the rate is so low. Should I go on a low rate tracker and continue with the over Payments (equal to about ?250- the same increase as if I was to go on a fixed)

I know people can't see into the future and nobody knows what interest rates will increase to- but My feeling is that if I went on a fixed now, I'm missing out in the ability to pay more of my mortgage off than if I went on the

tracker- even if rates went up by 2pc in the next 2 years- surely I'd be better off?


Anybody else in a similar situation with similar concerns?

I thought I could talk to a mortgage advisor and get some advice but John charcoals charge about ?450!


Cheers :)


Ps hope my rant makes sense!

ClareC

ClareC

Posted
Posted

Check what happens to your existing deal when the time limit ends, often it's x pc above base which given current base is likely to still be a low percentage. You can always then revisit the situation at any time should base rate look to be increasing etc.


There are lots of financial advisors that are remunerated by commission rather than you paying direct. I use Simon Hughes of Conran Estates in Greenwich for mortgage / property financial advise, he is independent and very good.

mockney piers

mockney piers

Posted
Posted
we just let ther deal expire and enjoyed the standard tracking rate at about 1.25%. It will of course go up eventually and we may consider remortgaging then, but inly once it pays to doso. Currently overpaying by about 250% and chunking off the capital while the proverbial sun is shining.
Loz

Loz

Posted
Posted

It's worth considering how much you have to pay off. As a lot of deals these days attract a fee of many hundreds of pounds, if you only have a few tens of thousands left on your mortgage it might actually be a false economy to change, as the lower interest payment per month may not be worth it.


E.g. ?25K at 4% is about ?83 per month in interest. ?25K at 2% is about ?41 per month in interest. If you get a new mortgage with ?750 fee then you will be 19 months down the line before the change is worth it.


Of course, this does not take into the account the pros and cons of fixed deals.

Shankley

Shankley

Posted
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Posted

Unfortunately I still have about ?190k to pay off!

One of the things I worry about is going onto a low interest tracker and then in 12 months time interest rates are still increasing and I decide that I need to fix, and the fixed deals are worse than they are now (even tho they are worse now than they have ever been whilst I've been paying a mortgage which is 10 years)

What gripes is fixing now when I know the tracker rates are much lower and more of my money is actually paying the loan off rather than interest

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