Tracker vearsus Fixed rate

[DonKing]

Hi,

I'm considering switching a mortgage to Halifax at the moment from First Active.

Halifax have offered me 4.85% fixed for 3 years. Fist active have now adjusted my mortgages to 4.75% tracker ie ECB + 0.75

I'm now a bit worried that the 3 year fixed may be expensive over the 3 year period. When the general consenus appeared that we were going to see at least one or two interest increases in the short term, the tracker appeared to be good value. Now I'm not so sure.

I do have cash flow problems through one thing or another (not least interest rate increases). If I stick with the tracker I'll probably go interest only for a while.

I know we don't have crystal balls but are there any recomendations out there?

Thanks

 

[DerKaiser]

4.85% fixed sounds competitive to me. If you have cash problems the certainty of fixed repayments should be pretty tempting

 

[doberden]

If it's a tracker make sure it's a tracker against the ECB rate not EURIBOR (inter bank lending rate). Banks are talking about increasing interest rates because the inter bank rate has shot up over the last few weeks so I'm sure they'll be sneakily changing their documentation saying their tracker rates will be measured against EURIBOR going forward...