Ecb + 1.55%

Given the radically deteriorating rates available to borrowers in the last month, I find myself considering taking a tracker rate of ECB +1.55%, which would currently amount to 5.8%. This would have my mortgage at approx 38% of my net take-home pay.

In today's uncertain climate, is 1.55% a bad tracker margin to accept?

I have read that tracker rates are being discontinued by many banks. This leads me to the conclusion that tracker rates must be inherently consumer-friendly and that I would be as well off taking one now (before they become extinct) rather than an unattractive fixed rate - there doesn't appear to be any attractive fixed rates any more! Also with tracker I could pay lump sums off my mortgage if the circumstances suited without a penalty.

I would be grateful for any comments on this, but would politely ask that replies don't take the form of "Bank X are offering X" - I have looked around for my circumstances, this is the best tracker rate that I can get.

Thanks

If this is the best rate around, assuming you have shopped around, then go for it. You can always go fixed at any time or switch to a SVR at no cost. Check the documentation to make sure the 1.55% margin cannot be changed during the mortgage term. Its standard that the margin is fixed but heard this might be changed by some lenders.

NIB seem to be still doing much cheaper rates, especially the LTV mortgages in certain circumstances. The online calculator quoted me 4.86% apr for a mortgage of 50% of the value of the property.

stress-test yourself, what % of your income would you pay out if rates rose another 2%?

is it above 50% of your after-tax income? if yes, you can't afford the house