Early Repayment Charges: 3% in the first year or 2% in any subsequent year.
Unlimited over-payments are allowed but if you pay it off in full before the end of the 5-year term, you'll have the above Early Repayment Charges.
I'm in a quandary because I'm currently on their lifetime tracker at 1.79% which is also an excellent rate. However, a 0.29% premium for a 5-year fix is quite good (increasing to 0.54% if BOE drop rates next month).
Top comments
pcs7038
22 Jul 163#18
+1
First port of call is to head over to moneysavingexpert.com. Lots of free material there to help you
djc0367 to Ammo71
22 Jul 163#17
None of us know without knowing your full personal and financial circumstances. For a start, do you have a 40% deposit?
If you don't already know about mortgages inside out already, I'd seriously encourage you get some independent advice.
mikeyp
22 Jul 163#11
Agree with the other guy, you'd be mental to leave your lifetime tracker anytime soon. Use the savings to pay down the balance quicker which will offset the hit on any rate rises later on.
I've just renewed on a fixed deal for 2 years with the Woolwich at 1.79% (fee free), the premium for longer term fixed deals just aren't worth it at the moment.
danby22 to bulletproof1979
22 Jul 163#6
You think there's a chance interest rates will go through the roof? Interested to know why you think so - I had assumed for want of propping up the economy during a state of uncertainty, the bank would've wanted the free flow of cash and they'd achieve that by keeping the interest rates low + plenty of QE...
All comments (50)
bulletproof1979
22 Jul 162#1
Personally I'd snap it up. While the next move will most likely be down, Brexit means all bets are of off for interest rates over the next few years, and particularly in the run up to and aftermath of leaving. There's every chance rates will go through the roof and 0.29% is a trivial price to pay for a little bit of security during the uncertainty.
danby22 to bulletproof1979
22 Jul 163#6
You think there's a chance interest rates will go through the roof? Interested to know why you think so - I had assumed for want of propping up the economy during a state of uncertainty, the bank would've wanted the free flow of cash and they'd achieve that by keeping the interest rates low + plenty of QE...
simont_space to bulletproof1979
22 Jul 161#15
Oh my aching sides.
mcormack to bulletproof1979
22 Jul 162#22
Do you work for First Direct?
DanB89
22 Jul 16#2
Would be interesting to know what pay off "in full" means - their website doesn't clarify. i.e. if I pay off all except £1 would that be full?
(Not that I am in a position to manage that in 5 years right now)
silver145 to DanB89
22 Jul 161#3
Yes that is correct. could pay all but £100 for example and split that over the remaining 3 years etc.
marathonic to DanB89
22 Jul 161#4
That wouldn't be paid off in full but the reality is that anyone in a position to overpay in full is probably best leaving a balance well above £1 because their money would earn more than 2.08% elsewhere
bulletproof1979
22 Jul 161#5
At this low rate of course if you were in a position to nearly pay it off you'd be better off sticking the money in accounts earning more than 2.08%, basically being paid to have your mortgage.
supermann to bulletproof1979
23 Jul 16#31
Liked by accident sorry. It makes sense but would mean if you ever had to apply for something that was means tested, in some gases your extra capital sitting there in those accounts would be counted and the equity gnored.
Civil claims for legal aid for example, your savings would be found to be over 8k so you wouldn't get any.
refaey
22 Jul 16#7
Personaly I'd jump on it as I'm currently on 2.5% with Coventry Building Socity.
However, if I was on 1.79% like you I'd stay there. The base interest rate is expected to go down to 0.25. Follow Carney (the Bank of England boss) as he hinted it will happen sooner or later.
marathonic to refaey
22 Jul 161#8
That's my thoughts. I'll be keeping a close eye on the rates of 5 year bonds but, based upon the current pricing, it looks like they expect a BOE base rate of 0.25% for the next 2-3 years.
Based upon the 10-year bonds, it looks like they expect rate rises, when they eventually come to pass, to occur very slowly.
Sure, there's a chance I could save a little by opting for the fix, but then I have the follow-on rate to worry about. One cannot overestimate the convenience of a lifetime tracker. This is especially true if I was to miss a payment on a credit card by accident during the 5 years, causing me to lose any chance of remortgaging to any of the lenders that usually top the best buy tables.
Any suggestion about where to get 2.08% on your savings ? Best ISA seems about 1.3%
marathonic
22 Jul 161#10
Lots of current accounts and regular savers pay more than 2.08%. It's a long time since ISA's were the best place to put cash - and even more so now with the £1000 tax free allowance on interest earned.
mikeyp
22 Jul 163#11
Agree with the other guy, you'd be mental to leave your lifetime tracker anytime soon. Use the savings to pay down the balance quicker which will offset the hit on any rate rises later on.
I've just renewed on a fixed deal for 2 years with the Woolwich at 1.79% (fee free), the premium for longer term fixed deals just aren't worth it at the moment.
naomipunkclan
22 Jul 16#12
These are usually limited incentives such as 5% on balance up to £2500 (Nationwide) or or 3% on balance up to £20k (Santander). Beyond that your next best place is pay down the mortgage or stocks and shares if you like risk
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Opening post
Unlimited over-payments are allowed but if you pay it off in full before the end of the 5-year term, you'll have the above Early Repayment Charges.
I'm in a quandary because I'm currently on their lifetime tracker at 1.79% which is also an excellent rate. However, a 0.29% premium for a 5-year fix is quite good (increasing to 0.54% if BOE drop rates next month).
Top comments
First port of call is to head over to moneysavingexpert.com. Lots of free material there to help you
If you don't already know about mortgages inside out already, I'd seriously encourage you get some independent advice.
I've just renewed on a fixed deal for 2 years with the Woolwich at 1.79% (fee free), the premium for longer term fixed deals just aren't worth it at the moment.
All comments (50)
(Not that I am in a position to manage that in 5 years right now)
Civil claims for legal aid for example, your savings would be found to be over 8k so you wouldn't get any.
However, if I was on 1.79% like you I'd stay there. The base interest rate is expected to go down to 0.25. Follow Carney (the Bank of England boss) as he hinted it will happen sooner or later.
Based upon the 10-year bonds, it looks like they expect rate rises, when they eventually come to pass, to occur very slowly.
Sure, there's a chance I could save a little by opting for the fix, but then I have the follow-on rate to worry about. One cannot overestimate the convenience of a lifetime tracker. This is especially true if I was to miss a payment on a credit card by accident during the 5 years, causing me to lose any chance of remortgaging to any of the lenders that usually top the best buy tables.
Your text here
I've just renewed on a fixed deal for 2 years with the Woolwich at 1.79% (fee free), the premium for longer term fixed deals just aren't worth it at the moment.