Have Tracker mortgage, when to fix?

S

Sydney100

Registered User
Messages
103
Hi

I have a tracker mortgage on my main residence and on a rental property...at the moment its happy days as we're saving over 2K on payments per month. But I keep reading economists say after the recession bottoms out the ECB will begin rising rates rapidly resulting in high inflation.

Just wondering what are my options, will the banks allow me to fix when the rates start to rise or will they keep me locked into a tracker, they were quick enough to ring me when the rates dropped offering me 'special offers' on fixed rates which of course were crap deals compared to my tracker!

Thanks
 
stay put, dont change,you have said yourself you are saving over2k so why change now when not necessary
 
No I don't mean change now obviously, i'm not that stupid. I mean as rates begin to rise and will obviously continue to do so, can I fix then???
 
You can fix into a mortgage when ever you like. It will just depend on when you do it as to what rate you get. So if for example rates start to rise they start at fixed rates of 3% for 3 yrs or 3.5 for 4 yrs etc. The offers will just be changing all the time you will have to jump in whenever you feel fit.
 
Be aware that rate movements by the ECB tend to be well-flagged, i.e. banks see them coming. So by the time you notice ECB rates increasing, banks may well have already increased their fixed rates in anticipation.
 
Short of a crystal ball miraculously working, no-one is going to be able to tell you the best time to fix. All I could suggest would be to check the best rate you could fix at now and the calculate the likelyhood of rate increases to push the tracker over this value within the fixed period. On the whole I'd rather stay on the tracker myself.
 
LDFerguson said:
Be aware that rate movements by the ECB tend to be well-flagged, i.e. banks see them coming. So by the time you notice ECB rates increasing, banks may well have already increased their fixed rates in anticipation.
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So basically kep an eye on the fixed rates banks are offering and when you see them starting to go up,fix.
 
My view is that unless there is less than, say 10 years left on the mortgage, then I would avoid fixed rates and stick to the tracker.

Over the long run, a tracker will save money over fixed rates. (just an opinion.)

Rates will, no doubt rise, but I think these things work in cycles so they will come back down again after maybe 6 to 8 years.

Don't forget that if you give up your tracker for a fixed rate you will never get it back again and will be at the mercy of the banks variable rate.
 
I presume that when the fixed rate finishes you can't just go back to the tracker?
That would put me off it.
 
kopkidda said:
So basically kep an eye on the fixed rates banks are offering and when you see them starting to go up,fix.
Click to expand...

That's not what I said or meant. Attempting to fix to beat variable rates is notoriously difficult. If you wait until you become aware that banks have increased fixed rates, you may be too late.

Personally I would (and will) stay on the tracker.
 
LDFerguson said:
That's not what I said or meant. Attempting to fix to beat variable rates is notoriously difficult. If you wait until you become aware that banks have increased fixed rates, you may be too late.

Personally I would (and will) stay on the tracker.
Click to expand...

Failing a crystal ball, that's about it. Most commentators are saying this is as low as ECB rates can go, but they've said that before. I kinda do think this is as low as they can realistically go though. Will they rise significantly over the next few years or terms of a fixed rate? Dunno, no one does.

Some of the banks are offering decent fixed rates, but to make them in anyway worthwhile it would require a very large increase in the ECB rate and happening within the next year or two.

As LD said, by the time we get to hear of a rate increase, the bank will have already altered their fixed rates.
 
Banks are losing money on most tracker mortgages particularly on the very low margin ones and probably will for a while. Banks do not lose money on fixed mortgages. The latter reduces your risk but it will cost you. Stick with the tracker unless you are financially quite vulnerable to interest rate movements.
 

Eh no one said you said anything brains!
 
Thanks for all those answers, one tracker is 1% over ECB and the other 1.25% both have been taken out in the last 5 years so I'll stick with them so.
 
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