Tracker or Fixed?

[rich83]

Question 

3.99% 2 year tracker
or
4.99% fixed for 3 years

My head hurts 

Thanks in advance!

Rich

[chungster]

2 year tracker.....still don't see interest rates rising much in next 2 years!

[Ifti]

2 year fixed - interest only mortgage.
Save the extra money and buy a small flat or 2 bed house.
Put it on rent.
Use the extra income towards your own mortgage.

That's what I'm doing. Current almost have enough for the deposit.

If not - then you are probably better going for a tracker, but bear in mind the rates can't drop any more. It'll only go up from here......

[rich83]

2 year fixed - interest only mortgage.
Save the extra money and buy a small flat or 2 bed house.
Put it on rent.
Use the extra income towards your own mortgage.

That's what I'm doing. Current almost have enough for the deposit.

If not - then you are probably better going for a tracker, but bear in mind the rates can't drop any more. It'll only go up from here......

Cant afford to do that.

[rich83]

Forgot to mention... we are first time buyers.

[Beddie]

2 year tracker.....still don't see interest rates rising much in next 2 years!

I'd be inclined to agree but the extra 1% of the fixed deal although more expensive does buy you some piece of mind whilst finding your feet as it were as a homeowner imo  
Depends on the monies involved and really a case of whether you feel the extra monthly outlay of the fixed deal is worth it for the piece of mind and stabilty that a fixed deal brings  

[vRS Carl]

What i would suggest is ask them to tell you what your monthly payments were if the interest rates rose to 5%.

If you can afford that then go with the tracker. If not then get the fixed.

We were lucky and came off our fixed term just as the global debt problems hit. We have remained on a tracker since then and it has been favourable to us for now but will be searching for a fixed rate term soon.

[chungster]

I'd be inclined to agree but the extra 1% of the fixed deal although more expensive does buy you some piece of mind whilst finding your feet as it were as a homeowner imo  
Depends on the monies involved and really a case of whether you feel the extra monthly outlay of the fixed deal is worth it for the piece of mind and stabilty that a fixed deal brings  

I would agree with u too in that scenario... I got a 2.5% + base 2 year tracker last year.

But yes it is wise to budget for potential rise. Good advice Mr B.

[TonyZed]

You're right it is all headache inducing, my head hurts trying to sort out a mortgage. The trouble is that half of my income is from Buy to Lets and the rest from my business. I only take out what I need, so the sods say I can't afford what I want based on that figure rather than the business's profit. 
Anyways, you should be able to beat those rates. Have a look on here, the Yorkshire BS one looks interesting if you qualify. I'm calling them tomorrow.

http://www.thisismoney.co.uk/money/mortgageshome/index.html

TonyZ

[rich83]

Tony... the rates might not be great, but we are quite high risk customers and most other lenders are offering about 40k less than the mortgage based on the above figures.

I think we are edging towards the fixed rate 3 years, just so we know where we stand (having been used to paying fixed rents for the last 6 years)

Just need to find out it i can rent one of the garages next to the house for a mk1 1.8T 

[Beddie]

Just need to find out it i can rent one of the garages next to the house for a mk1 1.8T 

Extra mortgage borrowing already?? 

[rich83]

Just need to find out it i can rent one of the garages next to the house for a mk1 1.8T 

Extra mortgage borrowing already?? 

[heavyd]

I just signed up today for a 2.9% tracker, no fees at all, no tie in etc etc. HSBC

[Top Cat]

I heard on the radio last week that 5 year fixed mortgages are at an all time low. My cynical mind tells me that means interest rates are going know where for the foreseeable future. So i would go base rate tracker. I have been on 2 year base rate trackers for the last 8 years, and it has saved me a fortune even with the ridiculous fees over the last 4 years. 

[vRSAlex]

I've been on a tracker for the past 3 years at 2.64%, and now that the term is over I drop to a bmr at 2.5% so I'm happy with that.  Rates are unlikely to rise over the next 2 and maybe 3 years and if they do its only going to be by .5%.

So I would go for the tracker and save quite a lot over the 2 years and if rates haven't moved by the end of the term then you will be able to switch to an equally good rate.