Fix rate or tracker?

[Kevin Rettie]

I'm in the process of buying another BTL and just wondered what peoples thoughts are on going for a fixed rate or tracker mortgage?

Personally, I have a gut feeling that interest rates will not go a lot higher as there is a fine line that the government and BOE have to tread to get people spending and investing to grow the economy. Trackers at the moment seem to be giving better rates and I am leaning towards going down this route.

Am I being overly optimistic? I'd be keen to see what everyones thoughts are... 

 

[astonthemortgageguy]

Hi Kevin,

Without a crystal ball it's hard to say for sure, but with some tracker rates being around 2% less than their comparable fixed rate, the majority of my BTL clients have been opting for trackers. Most don't expect rates to go up by a further 2%, plus most products don't have any ERC's, so as soon as the economy improves or their circumstances change, they can jump ship to another product

[Kevin Rettie]

Thanks Aston, thats exactly my thinking. Some of the stress testing for trackers seem overly excessive at the moment though, it seems like lenders want to tie you into higher rates for longer periods of time!