Pop
Member
Registered: 8th May 03
Location: Reading
User status: Offline
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Hi,
We are coming to the end of our 5 year fixed mortgage and are looking at our first re-mortgage.
We are currently paying £849 p/m and will have a 24 year term left. We are also looking at adding to the mortgage for our upcoming house extension.
I've got a couple of options below and I would appreciate peoples thoughts. The options are by no means exhaustive; however, they do cover off both fixed and tracker scenarios:
Option 1
Stay with the current bank (Santander) on a 5 year fixed at 3.19%. Monthly payment of £813.21 and an arrangement fee of £999. This would allow us to overpay £2,147.40 over the 5 year term based on our usual £849 payment.
Option 2
Move to HSBC on a lifetime tracker at 1.99%. Monthly payment of £715 and an arrangement fee of £999. This would allow us to overpay £8,040 over a 5 year term based on our usual £849 payment, subject to the base rate not changing.
With option 2 I know that the base rate will increase and probably sooner rather than later.
So here lies the issue. Do I go with the fixed as it plays on people's fears that rates will go up, or risk the tracker for potential gain? I know no one has the answer because if we did everyone would make the correct choice.
What I am keen to know is peoples thoughts on what they would do? Do you think when the rates rise it will be by 0.5%? Do you think we will see rapid a sharp rise?
We aren't that far off hitting the triggers the BOE set out for a rise!
All thoughts and opinions are appreciated.
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AndyKent
Member
Registered: 3rd Sep 05
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How much remains on your mortgage. I would stick the figures into a spreadhseet and work out at what point either one would win if rates rise at differing points.
Hard to answer without knowing the scale of borrowing though.
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Cavey
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Registered: 11th Nov 02
Location: Derby
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They said they can't guarantee the base rate won't rise until after the election next summer, so that to me suggests they are planning to rise it before that. I personally think it'd only be half a percent, but obviously that's impossible to tell really.
Personally, we when remortgage again in February, I'll be looking for a couple of years fixed rate at least, as I reckon the rates will rise in that time
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Pop
Member
Registered: 8th May 03
Location: Reading
User status: Offline
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Cavey - Cheers, I'm leaning towards fixing it
Andy - House is worth approximately £260,000 and including the amount we want to borrow we will have £163,500 outstanding (62.9% LTV). Putting it in a spreadsheet is a good idea to figure out at what point it would be better to fix the rate.
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IvIarkgraham
Premium Member
Registered: 27th Mar 04
Location: Ellesmere Port, Cheshire
User status: Offline
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Option 2 imo
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deano87
Member
Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
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Option 2. As there is no fix, you can always fix at a later date, albeit having to pay additional arrangement fees.
Just going ahead with out first mortgage and fixed for 2 years.
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AndyKent
Member
Registered: 3rd Sep 05
User status: Offline
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quote:
Originally posted by deano87
Option 2. As there is no fix, you can always fix at a later date, albeit having to pay additional arrangement fees.
Misses the fact that the next fix would be more expensive (ie. Higher rate) because base rate will have just risen.....
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deano87
Member
Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
User status: Offline
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quote:
Originally posted by AndyKent
quote:
Originally posted by deano87
Option 2. As there is no fix, you can always fix at a later date, albeit having to pay additional arrangement fees.
Misses the fact that the next fix would be more expensive (ie. Higher rate) because base rate will have just risen.....
We fixed for 2 years at 4.99%. Still not sure if should have gone 5.49 for 5 years 
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