First time buyer - tracker or fixed rate?

[DimPrawn]

Where's the poll?

Didn't do one. Got too much flak from cretinous people who needed me to help them choose the correct option.

[Cyberman]

Current Offset tracker with First Direct is 2.89%(tracks at 2.39% over base rate) with 799 quid arrangement fee or you can fix for two years at 2.99% with arrangement and booking fee of 898 quid reverting to SVR(currently 3.69%).

Rates will not be rising much for the next year if at all, and could remain very low for two years, so I would not fix if I were you. I would recommend looking at a fix once rates start to rise.

[FSM with Cheddar]

Rates will not be rising much for the next year if at all, and could remain very low for two years

Exactly, so there is no point staying on a variable rate. And when rates start going up, you won't be able to get such a competitive fixed rate (or any at all).

[Iron Condor]

Why not buy now? It will be a few months until we're ready to go.

£What I'm really looking for is some pros and cons of tracker vs fixed rate mortgages

Thanks

House prices are set to fall atleast another 15% and possibly more.

Thats 40K on a 250K house.

And you are more concerned about losing a few thousand a year if you make the wrong decision by going Fixed or Tracker.

But to answer your question, i dont see the BOE base rate going much higher than 5% over the next 10 years. There is too much debt around. Increasing rates to that level is enough to tame inflation. 5% these days has the same effect on the ecomony as 10% rates had 15 years ago.

So i am sticking to my tracker mortgage.

[DimPrawn]

http://news.bbc.co.uk/1/hi/business/7967715.stm

House prices are falling even faster than before in England and Wales, according to the Land Registry.

Prices dropped by another 2% in February, pushing the annual rate of decline from 15.1% to 16.5%.

It means the average property is now worth £153,862, down by £30,361 in the past year, and back to the level last seen in September 2004.

Prices have now fallen for 18 months in a row, dragged down by the impact of the recession and the mortgage drought.

The Land Registry's figures confirm the downward trend indicated by other surveys, such as those from the Halifax and the Nationwide.

Hand-in-hand with the fall in prices has gone a slump in sales.

This week the HM Revenue & Customs (HMRC) published figures showing that property sales in the UK hit a new low.

There were just 42,000 completed transactions in February, only slightly higher than in January but half the level seen a year ago.