Tracker mortgage

G

Glenbhoy

Registered User
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Someone was asking me if it's possible to switch from a tracker mortgage to a fixed rate - anyone know?
 
Depends on your lender. Why do you want to do this? Use the search to find the many previous discussions about tracker (usually versus standard variable and fixed) rates and why to go fixed.
 
I expect the rationale is that with possible rate rises just around the corner and fixed rate at historic lows, people may feel that they can beat the banks (not easily done, as these guys know more about it than most of us). Anyway I shall read the previous discussions, thanks.
 
Lenders were urging borrowers to fix months ago. Since then rates have fallen further. Don't bother trying to time the market. Only fix if you need the predictability that fixed repayments give you or you might be hard pressed if variable rates increased by a few %. In general you will pay a premium for going fixed rather than saving money in the long run.
 
I agree with Clubman's points above. Having said that, if you're sure it's what you want to do, you can switch from a Tracker variable rate to a fixed.

Be aware that some lenders continue the old practice of offering different (dearer) fixed rates to their existing customers than to new ones. If your lender is one of these, tell them you want their best fixed rate, i.e. the one they offer new customers.

Check also if they will allow you to revert to their best tracker variable rate if you want it at the end of the fixed rate period.

Liam D Ferguson
www.ferga.com
 
Last edited by a moderator:
Liam,

With reference to your point below, we got notification in the post yesterday that we are nearing the end of 1 year fixed (new business) rate and giving us the options for next year...needless to say, all rates are higher than the rate we were on for the last year.

Is it possible to negotiate this 'new business' rate going forward? Have you experience of lenders agreeing to this?
 
Is it not also the case that banks tend to 'price-in' any expected rate rises into their fixed rates? As clubman pointed out, the banks are as bad as the rest of us at predicting rates - if they were any good, their economists would have retired as millionaires ages ago. You're prob as well off on a tracker, and pray the Germans, French and Italians continue their current economic malaise!
 
Hi mobileme,

Use the Best Buys list here on Askaboutmoney to determine what's the best rate available to new customers for your size of mortgage. Then contact your lender and tell them you're thinking of switching providers unless they offer you a comparable rate. Sometimes it works, sometimes it doesn't, but it's worth a shot. Let us know how you get on.
 
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