Mortgage Fixed rate or tracker?

[TheEagle]

I have had an offer accepted for a flat.

I am looking into the various options for mortgages and im trying to decide between a fixed rate and a tracker.

So far the fixed rate mortgages i have been offered have had an APR of between 6 and 7% which is a little steep.

The trackers have had a lower intrest rate of about 5%

I am quite tempted to go for the fixed rate as the trackers are about 4.5% above the BOE which is quite high historically also with the low BOE rate we have had for a while as well as the "Quantitive easing" I expect inflation to be a problem in the not to distant future.

Anyways have any thought or advice?

[Olly]

Those rates seem a bit steep or are you restricted by poor LTV ratio?

I was looking at FirstDirect and their offset base rate tracker is 2.09% above base with a £499 fee at the beginning and £150 at the end...thing is you need a 35% deposit

[FarmerPalmer]

How long are you locked in to each offer ?

My tracker, a couple of years ago was base + 1.09%, so base + 4.5% is steep, but that is the current market.

Interest rates will probably only be going one way, but its going to be a while before we start a recovery, so could be a couple of years yet.

[kaiser78]

Tracker - be a while until interest rates rise to the level where they are more cost effective than having stayed on a tracker.

[gingerjedi]

My Nationwide tracker is up soon, I'm going for the standard variable rate for a while as I don't know of a single instance where a fixed rate has saved money overall.

I'm sure they just look at the financial forcast for the next 5 years, work out an average and add a bit to cover themselves.

[HairyArsedBloke]

I'm sure they just look at the financial forcast for the next 5 years, work out an average and add a bit to cover themselves.

Ya fink? Wot a bunch of crafty tinkers.