Fixed or track

[bmwmike]

About to remortgage and can get a 150k 30%LTV at 1.99% tracker (lifetime) or fix for 2.14% for five years.

I'm leaning toward tracker as I won't have to buy another £750 product fee in 5yrs time and I doubt interest rates will go up in five years.

What would you go for and why?



Thanks

[bmwmike]

Not having to remortgage is a plus point for sure.

The tracker I'm looking at is BoE rate plus 1.49%

Rates at 6.5% I could swallow up, that's an extra 400 quid. I'm more loathed to spend any more than I need to rather than worrying about the payments themselves as such. The mortgage is relatively small.

I guess nobody has a crystal ball but I can't see rates going up for a long time unless there is some currency related shock and they hit 15% odd again for a day to keep the £ up. IIRC the conditions that caused that don't actually exist today do they? Wasn't the £ required to stay within a specific range.

To some degree I think immigratiom has replaced interest rates as the go to wage control lever.

So my head says rates will be bobbing around zero for a long time yet.

[bmwmike]

Agree on the .15 being a no brainer but even if rates go up .15 in the next 5 years equalising the fix and tracker, I'd bet the spread would be much wider by then. So, the tracker would be relatively the same amount as today's fix but probably less than a 5yr fix at that point.

Crystal ball territory admittedly.

Think I'm going to borrow another 50k and then fix on the larger mortgage.

Thanks for all the insights.

Cheers

[bmwmike]

Went to sign up for a fixed deal this morning with HSBC 2.04% for five years but a 999 product fee. Sums say it's probably worth the fee over the 2.14 rate (750 fee) or 2.39% at no fee. 10% over payments allowed so no brainer decision at this level over tracker as others have said.

Anyway I wanted to simultaneously remortgage and get an extra 50k for home improvements but it's not possible to do that via the website. I have to take 2 products out (confirmed by speaking to HSBC) pay 2 product fees then request one of the fees to be refunded.

Crazy.

Anyone else had this? It might actually be easier to move to a different bank.