Remortgage - fixed or tracker?
Discussion
Current mortgage deal with Nationwide ends in a couple of months. Wondering whether to go fixed again, or tracker.
There is currently hardly any diff between fixed and tracker rates, which seems to suggest the banks think that rates will either fall (how can they?) or stay about the same.
About 10yrs and 150k left to go. My priority is to minimise full term costs rather than monthly payments.
What's the PH view?
There is currently hardly any diff between fixed and tracker rates, which seems to suggest the banks think that rates will either fall (how can they?) or stay about the same.
About 10yrs and 150k left to go. My priority is to minimise full term costs rather than monthly payments.
What's the PH view?
The base rate can only go a further 0.1% down (discounting negative rates) and most trackers will have a floor of 0% anyway.
Unless you need the flexibility or a specific feature of a tracker it would be hard to look past a fixed rate. Especially if your LTV is below 60% you could do a lot worse than fix it for 5 years. Nationwide have some 10 year fixed that may appeal but it is quite a restrictive product should your circumstances change.
Unless you need the flexibility or a specific feature of a tracker it would be hard to look past a fixed rate. Especially if your LTV is below 60% you could do a lot worse than fix it for 5 years. Nationwide have some 10 year fixed that may appeal but it is quite a restrictive product should your circumstances change.
Tks. Just coming off a 5 yr fix. Will prob stick with Nationwide anyway as they seem to be pretty competitive and it is less faff.
I have spent most of the last decade waiting for rates to start rising, but in vain. Right now it seems even less likely than ever, so working on the contrarian principle perhaps they will finally start to go up;)
I have spent most of the last decade waiting for rates to start rising, but in vain. Right now it seems even less likely than ever, so working on the contrarian principle perhaps they will finally start to go up;)
dontlookdown said:
Tks. Just coming off a 5 yr fix. Will prob stick with Nationwide anyway as they seem to be pretty competitive and it is less faff.
Don't bank on the less faff bit. I've just spent nearly three months trying to sort a mortgage with Nationwide (existing customer for 8 years although first mortgage application with them). Whole process was a nightmare of incompetence, losing documents, and delays and they eventually declined it as their 'risk appetite' has changed in the last few months. FWIW Sarnie on here has just sorted us a deal with Santander in 3 weeks start-to-finish.It's hard to look past the fixed rate deals currently on offer IMO, rates can only really go up from here.
Welshbeef said:
OP you could take out a ten year mortgage fixed rate and that will see you clear the mortgage in the same time frame.
Also removes hassle of moving again in the future.
Hmnnn...expensive. Money spent on higher interest rates may be put to better use paying down the capital each month perhaps.Also removes hassle of moving again in the future.
Julia121 said:
Welshbeef said:
OP you could take out a ten year mortgage fixed rate and that will see you clear the mortgage in the same time frame.
Also removes hassle of moving again in the future.
Hmnnn...expensive. Money spent on higher interest rates may be put to better use paying down the capital each month perhaps.Also removes hassle of moving again in the future.
But years 6-10 for The 5 year is utterly unknown.
They could be much more than the 10 year fixed rate
So £150k 1.39% for 5 years v 2.14% for ten years what’s the max % the 6-10 year can go up to for the total interest charge to be the same.
Do you think by Oct25 you can find a mortgage deal better than that? Maybe. But you are comparing incredibly low rates now but the world might be extremely different by then
The absolute difference assuming 1.39% whole term 10 years v 2.14% for 10 gives a difference of £6k even if you could secure 5 more years with a £1.5k fee it would only be £4.5k saving. It’s not really that tempting also you could save £6k from the ten year by simply over paying
They could be much more than the 10 year fixed rate
So £150k 1.39% for 5 years v 2.14% for ten years what’s the max % the 6-10 year can go up to for the total interest charge to be the same.
Do you think by Oct25 you can find a mortgage deal better than that? Maybe. But you are comparing incredibly low rates now but the world might be extremely different by then
The absolute difference assuming 1.39% whole term 10 years v 2.14% for 10 gives a difference of £6k even if you could secure 5 more years with a £1.5k fee it would only be £4.5k saving. It’s not really that tempting also you could save £6k from the ten year by simply over paying
deggles said:
dontlookdown said:
Tks. Just coming off a 5 yr fix. Will prob stick with Nationwide anyway as they seem to be pretty competitive and it is less faff.
Don't bank on the less faff bit. I've just spent nearly three months trying to sort a mortgage with Nationwide (existing customer for 8 years although first mortgage application with them). Whole process was a nightmare of incompetence, losing documents, and delays and they eventually declined it as their 'risk appetite' has changed in the last few months. FWIW Sarnie on here has just sorted us a deal with Santander in 3 weeks start-to-finish.It's hard to look past the fixed rate deals currently on offer IMO, rates can only really go up from here.
I'm intrigued with the above as well. Wife and I are soon to be remortgaging and wondering what option will be best, we plan to start a family soon and wife will give up work for the foreseeable future. Will it be impossible for us to get another mortgage in say 5 years time if our combined income doesn't meet affordability? I'm thinking of either taking out a 10 year fixed by which point she should be earning again or going for a tracker so I don't have the issue of having to apply for a new mortgage after a few years.
Bumblebee7 said:
I'm intrigued with the above as well. Wife and I are soon to be remortgaging and wondering what option will be best, we plan to start a family soon and wife will give up work for the foreseeable future. Will it be impossible for us to get another mortgage in say 5 years time if our combined income doesn't meet affordability? I'm thinking of either taking out a 10 year fixed by which point she should be earning again or going for a tracker so I don't have the issue of having to apply for a new mortgage after a few years.
Or you could go balance 7year. Right now I’m my view is
1. rates are extremely low / not much lower that they can move.
2. We have huge headwinds coming massive unemployment for years, Brexit impact, real estate value unknown.
3. Your personal position - it’s changing or wants to change. Affordability can change meaning you are a mortgage hostage potentially
4. Of your happy with the rates now go for it - no one not even Warren Buffet knows what the world will be like in 5 years - specifically with Covid specifically with Brexit and specifically with getting over the virus and then the much higher taxes you and we will all have to pay for it.
There clearly isn’t a one size fits all. But wanting a family means schools so youd likely not be moving at least for 10 years - and the reason many brokers flag about 10 years is its a long time and circumstances change, one will not (most likely) you keep your kids in the same primary and secondary school.
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