Two years ago many lenders were offering some incredible tracker deals with rates tracking the bank base rate very closely, and in some cases at a discount to the bank base rate. The result has been many of those with base rate trackers from 2007 have been paying very low (in some cases zero) mortgage interest. But all good things come to an end.
The question for many people as they exit these two year tracker deals is this; do they stay with their existing lender and their SVR, or look for a mortgage elsewhere?
There are many factors to consider here, one being whether you need the security of a fixed rate mortgage knowing what your monthly outgoings will be, or whether you want to go with a variable rate product. Before making a decision it is best to read up on what the market thinks will happen with mortgage rates, and also take the advice of a good mortgage broker / financial advisor.
At this time the SVR for many lenders is below 4%, in some cases less than 3%. If your view is that interest rates will remain low for years to come then maybe the SVR product is best for you. If you think the interest rates will rise and soon be back to the 5% plus levels then maybe a fixed rate at sub 5% is good for you – it is a choice based on your circumstances.
We do not offer mortgage advice on this blog but you will find much information relating the UK economy and views on where interest rates are heading. At the end of the day it is a personal choice as to which mortgage product you choose, but for me I like tracker mortgages, my own view is that it will be some time before base rates rise significantly, so for now I am keeping away from fixed rate products.
