Fixed, variable or tracker mortgage?

E

eskei

Registered User
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Hi

The interest rate is going up really high now. And im getting a mortgage at this bad time :-( even i got a mortgage approval with a much lower interest rate.

now im just wondering which one i should go for? Fixed, variable or tracker? what is difference between tracker and variable mortgages in plain English? if i go with the fixed, do you think in the next 2-5 yrs the interest rate will drop?

Thanks!
 
eskei said:
now im just wondering which one i should go for? Fixed, variable or tracker?
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What are your circumstances - e.g. income, house price, mortgage amount and term etc.?
what is difference between tracker and variable mortgages in plain English?
Click to expand...
?
if i go with the fixed, do you think in the next 2-5 yrs the interest rate will drop?
Click to expand...
Nobody can tell for sure.
 
Has that 4.95% fixed for 5 years offer being withdrawn - the one you got a few weeks ago?
 
yeah unfortunately yes. well, i still gotta a good few month to go before i take out any mortgage. really hope the interest rate will go down a little bit. not sure which one is better fixed or tracker? i dont want to lose out if i take out the fixed rate if the rate is going down or keeps the same.
 
well, i could get around 210.000-240.000 which is enough for what i need, before was quoted 40 yrs fixed at 4.95%, now the rate is between 5.75%-6.24% 5 yrs fixed depends on which bank, so wondering if i should go with the tracker.
 
You have still not posted the details that I asked about which means that it's difficult to comment.

If you are stretching the mortgage over 40 years then I presume you may be stretched in affording the mortgage that you require. If meeting the repayments (especially if rates increased) would be difficult for you then it might make sense to fix for a period. 5 years is a long time to fix and restricts flexibility in terms of moving, making capital repayments etc. without penalties. If you can easily afford the repayments even if rates were to increase by a few percent then perhaps go with a competitive tracker. The total cost of a mortgage over 40 years rather than a shorter term will be very significant. See Karl Jeacle's mortgage calculator.
 
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