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What are we thinking about trackers at the moment?

Discussion in 'General Discussion' started by Jez, 15 Oct 2009.

  1. Jez

    Caporegime

    Joined: 18 Oct 2002

    Posts: 32,501

    Ok, very large (for a consumer) mortgage, currently in year 2 of a 3 year fix at 6.4% with a 2% get out.

    Tracker deals currently sit at 2.29%+base, with a booking fee of about a grand, on a 3 year tie in.

    The 2% penalty plus booking fee would in theory be recouped by month 10, plus the new product has much better overpayment facilities.

    What do we think is happening with the BOE base at the moment? The last thing i would claim to be is any form of expert in the financial world. From what i can see as a n00b it looks as though the low rates are here for a good while yet.

    Good idea in theory if i can find the 2%, but it would be nice to get others' opinions on the matter :)
     
  2. Pestilence

    Capodecina

    Joined: 22 Feb 2008

    Posts: 11,052

    I heard tell that interest rates may begin to rise again starting Q2 next year, but I'm no economist so can't say for certain.

    I'm stuck in fixed until 2011 though, so am basically sidelined throughout until then.
     
  3. bullit in head

    Hitman

    Joined: 21 Jan 2004

    Posts: 952

    Location: Derbyshire


    so two months of saving...(have I got that right) as you in the 2nd year already so could be less. may as well sit it out and see what around in the years time. might be better than now rates wise.

    bullit
     
  4. Jez

    Caporegime

    Joined: 18 Oct 2002

    Posts: 32,501

    Not really 2 months of savings. By month 10 i am equal including the booking fee and penalty. By year end i am several thousand quid up.

    If i were to exit in a years time i would be several thousand quid down from the 2 months of saving, PLUS the new exit fees of 1% (final year of fix penalty) PLUS the new booking fee for whatever i got.

    Its a substantial saving IF rates stay low. Hence wanting others opinions really :) If BOE base gets as high as ~3% the savings will be wiped out and the whole thing wont have been worth doing really :)
     
  5. jamief

    Soldato

    Joined: 23 Sep 2005

    Posts: 5,399

    Location: Dundee

    I think a tracker is a good bet just now.

    I've just taken a discount tracker with Britannia, although it has no ERP or minimum term so I intend on switching when the rates creep up. I'd be a little more wary of a 3 year fixed tracker, but probably nothing to worry about, imo.
     
  6. stoofa

    Capodecina

    Joined: 4 Mar 2003

    Posts: 12,080

    Location: Chatteris

    According to the BBC website and a few others the other day, they aren't expecting interest rates to rise until the middle of next year.

    Personally I'm staying on SVR.
    I'm in this great position of paying SVR and I'm on a month-to-month contract.
    As soon as there is any sign of interest rates and mortgage rates going up I can jump onto something and fix myself for a nice period until we're past the "doom" that will come at some point.
     
  7. [TW]Fox

    Man of Honour

    Joined: 17 Oct 2002

    Posts: 156,666

    What I've seen recently suggests interest rates will remain low (sub 2.5%) until circa 2011.
     
  8. Jez

    Caporegime

    Joined: 18 Oct 2002

    Posts: 32,501

    Think i am going to go with a middle ground option which will still repay come month 10 (ish).

    HSBC seem to be offering 2.49+base with no tie in or early repayment charges, cheapish 699 booking. Then i can always fix myself if rate forecasts begin to look bad. Although the rate takes a slight hit there i am rather scared of a 3 year tracker, the implications of a higher rate could cause me serious issues with the size of the debt.

    Better idea do you lot think?
     
  9. Rotty

    Don

    Joined: 18 Oct 2002

    Posts: 40,725

    Location: Notts

    as Fox says indications are that rates will stay low for longer than originally thought

    I have just remortgaged on a tracker at +2.24% with a £995 fee ( HSBC too )

    This one has no tie in period so I can get out if things move quickly, I could have got slightly better with a tie in period


    and to think on a previous property I had a base + 0.14% tracker for the term :(
     
  10. Jez

    Caporegime

    Joined: 18 Oct 2002

    Posts: 32,501

    Sadly my total LTV doesnt meet with that lower product, so next one up for me :( No tie in though so hey ho :)
     
  11. Jez

    Caporegime

    Joined: 18 Oct 2002

    Posts: 32,501

    All done and dusted now, paperwork in the motions *gulp*. Very hard to write such a huge cheque for the early repayment, but it should pay off and will allow me to overpay with freedom. Reassuring to see that you went for a similar deal to me, you seem to know your stuff. :)

    On the subject of the rates, coming from a 6.4% fix this will be a nice little holiday for me, i can only watch in envy at the people with trackers at if not below base :(
     
  12. Rotty

    Don

    Joined: 18 Oct 2002

    Posts: 40,725

    Location: Notts

    same here, had phone call this morning saying all approved
     
  13. Wyrdo

    Capodecina

    Joined: 19 Feb 2004

    Posts: 15,055

    Location: Darlington, UK

    I'm in exactly the same position.
     
  14. Jez

    Caporegime

    Joined: 18 Oct 2002

    Posts: 32,501

    Forgive my ignorance on the subject, but why SVR over a tracker? What are the implications here, they dont seem as good to me?
     
  15. Bear

    Capodecina

    Joined: 24 Oct 2002

    Posts: 12,719

    Location: Bucks and Edinburgh

    I think its because if you are on the SVR you dont have to pay any fees and you arent tied in for any particular period. When interest rates start to go up, you can fix at a relatively low rate hopefully and if the rates continue to keep going up, you wont be affected by the rises. With the tracker, you have to pay a fee generally and if the rates climb, you are still at the mercy of the rises.

    I guess it all comes down to whether you think the rates are going to climb in the period you are tied in on the tracker and if so by how much. Im out of my fixed rate in 6 months and Im going to sit on the SVR until I see the rates go up then fix.

    edit: just read that you dont have any tie ins, so no penaltys at all for bombing out of the tracker ?? Goes to show I should read the thread properly as Rotty verified no tie ins. :embarrassed:
     
    Last edited: 19 Oct 2009
  16. oneilldo

    Wise Guy

    Joined: 16 Jan 2003

    Posts: 1,813

    I've gone for a tracker at 2.79%+base for 2 years. Whilst it is higher than I could have got it incurred no fees as was with existing lender and I can move to a tracker within the 2 years without incurring an early repayment charge (with the same lender). Over a two year period it works out about the same.
     
  17. Jez

    Caporegime

    Joined: 18 Oct 2002

    Posts: 32,501

    Yeah no tie in...although i am paying a smallish £699 "product fee". As long as rates dont go mental within a 9-10 month period from now i should be in profit by this switch and will have been allowed to overpay unlike now.

    All a gamble i guess :)
     
  18. MikeTimbers

    Soldato

    Joined: 18 Oct 2002

    Posts: 7,129

    Location: New Eltham, London

    My tracker finished and I'm on SVR of 4.24%. Although I could get back into a tracker, the margin the banks are charging is excessive and I'm waiting for someone to get competitive and set a tracker at 1-2% over base. Then I'll jump in.