Fix and track mortgages to hedge bets by Finance News Bulletin

Published: 31/08/07

This is Money has been named monetary Website of the day in recognition of its campaigning coverage >> ReadChoose a fixed-rate, and you're borrowing near the top of the marketplace Go for a tracker and there might be at least one if not two more speed rises, says economistsOne solution is to evade your bets with a mix and match loan

You can split your mortgage, fixing part of it and tracking the base rate with the other half'The benefit is that you are effectively splitting the risks concerned,' says Jonathan Cornell of brokers Hamptons Mortgages'The disadvantage is that you have to do twice the research You also need to check that both finish at the same time, or you could find half your mortgage on the luxurious standard variable rate, which is never a good thought

'Not all lenders will allow splitting your house loan - Northern Rock does not allow you to have more than one product at a time, for instance, while Skipton, countrywide and Halifax do Also a supple or offset product cannot be mixed with a non-flexible contract, according to David Hollingworth of brokers London & Countryusually, only one arrangement fee has to be paid but, if they differ, the higher of the two fees will be chargedHigher arrangement fees are usually practical to the lower-rate loans so, when splitting the typical mortgage of £130,000 into two £65,000 loans, taking a higherrate with a lower-fee could be a improved option

Nationwide has a two-year, fixedrate at 608% and a two-year tracker at base rate advantage 018%, making a present rate of 568%

Neither has an arrangement feeBorrowing £130,000 divided evenly between these two on a 25day repayment mortgage income £19,875 would be repaid over the two years This mechanism out cheaper than Skipton or Halifax, which both have a two-year fix at 584%

But Halifax's follower is 584% bottom rate plus 034%) while Skipton's is 608% bottom rate plus 0

49%) With the arrangement charge of £299 with Halifax and £599 at Skipton, these options approach to more than £20,000 over the two yearsAnother option - if you consider base rates will drop in a year - is to opt for Woolwich's fasten and tracker This has a one-year fixed speed of 5

39%, costing £78980 a month, which switches to a life-time tracker of base speed plus 039% (currently 589%), making monthly repayments of £817

70Over two years, the price would be £19,889, including the £599 fee There are salvation charges if you move within three years, though one can switch into another Woolwich fixed rate after the first yearIt is a difficult time for anyone remortgaging, or indeed, those looking at buying their first home

It is almost a certainty that the Bank of England will increase tax next month, especially given that their decision not to lift them earlier this month was a very close-run vote The universal consensus is that we are likely to see one more rate rise this day, taking the base rate to 6% which, it is hoped, will be sufficient to manage inflation and begin to curb the ever increasing levels of community borrowingMost economists are predicting a steadier 2008 price rises has been reigned in a little already, assisted by lower energy expenses, and if this continues, we could well see interest rates approach back down a little next year

As ever when selecting a mortgage manufactured goods, the individual's attitude to risk is the very important decision-driver We've seen 4 rate rises in a year and, at the same time as this looks unlikely next year, customers chosing a follower product should consider the consequences of thisSelect a loan word 12 months (1 year) 24 months (2 years) 36 months (3 existence 48 months (4 existence 60 months (5 existence 72 months (6 existence 84 months (7 existence 96 months (8 existence 108 months (9 existence 120 months (10 years)Please select a kind of insurance Life insurance Home and contents automobile Breakdown services Health - medical Health - dental journey Pet - dog Pet - cat GOThinking about investing in property This is Money has the best buy-to-let in order

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