knowlittle:Hi all, I'm a first time buyer, basically a mortgage novice! I have decided with my girlfriend that we should step on the ladder and any advice would be appreciated. We have a good lump sum we can use as a deposit and with the help of our families we should be able to aim at a 70% mortgage. Given the current rates, I think it'd be a shot in the foot to go for a fixed rate mortgage (let's say 5%). I don't think interest rates will go up significantly in a couple of years and after that fixed mortgage products will convert to a variable rate anyway. I am considering the Barclays Woolwich lifetracker product: Barclays basic rate + 2.27%, currently 2.77%. Although I am planning to apply for a 15 year mortgage, I think we can significantly lower the outstanding balance after the early repayment charge period 31/01/2012. I have checked with Barclays and there's no charge nor limit to overpayment after 31/01/2012. I know my guess on interest rates is good as anyone's but, sticking to it for a second, I would be able to benefit from the low rates for the next 2 years and avoid nasty surprises by making a free big overpayment in case the rates hit the roof in the future. I know I need to get independent mortgage advice but I was wondering whether the forum can add something I am not considering perhaps. We have permanent jobs, clean credit history and deposit. Is the lifetracker the best option? Thanks for any advice. K

You are on the right lines indeed. The Woolwich deal is among the best on the market. Also check out Northern Rock at the moment. Their rate is 2.59% (base + 2.09%) for that LTV banding, and they allow unlimited overpayments even within the two-year initial period. After that it would be likely that a longer-term fixed rate would be preferable, as interest rates will be on the rise at that point.

Hi,

Unfortunately, I'm in no position my self to advise (first time buyer like yourself), I can only tell you what I've done after careful consideration and discussions with my Step dad who is a qualified IFA among other things. It did take a lot of research before everything started to make sense.

I found that for me personally, the lifetime tracker was not competitive enough to go for, I was also after an interest only mortgage, which limited my options.

I opted for a 2yr tracker at 2.47% above base. The reason really came down to the fact I wanted an interest only mortgage and I am hoping in two years to be able to move onto a half decent capital repayment mortgage.

After a long time of thinking, I felt it wasn't worth fixing the mortgage because the base rate would have to increase significantly in two years for it to cost me more; compared to a much higher fixed rate I was offered at the time. It is possible that could happen but that's the risk I have taken. I have budgeted enough for the base rate to increase, to cover me up to around 5%, but by then I would have hoped I would have a decent fixed capital repayment mortgage in place.

I hope that provides an insight into my reasoning, and I’m sorry it probably didn't help very much with your particular query.

Good luck with the first step on the property ladder

Dangerman

Hi all,

I'm a first time buyer, basically a mortgage novice! I have decided with my girlfriend that we should step on the ladder and any advice would be appreciated. We have a good lump sum we can use as a deposit and with the help of our families we should be able to aim at a 70% mortgage.

Given the current rates, I think it'd be a shot in the foot to go for a fixed rate mortgage (let's say 5%). I don't think interest rates will go up significantly in a couple of years and after that fixed mortgage products will convert to a variable rate anyway. I am considering the Barclays Woolwich lifetracker product: Barclays basic rate + 2.27%, currently 2.77%. Although I am planning to apply for a 15 year mortgage, I think we can significantly lower the outstanding balance after the early repayment charge period 31/01/2012. I have checked with Barclays and there's no charge nor limit to overpayment after 31/01/2012.

I know my guess on interest rates is good as anyone's but, sticking to it for a second, I would be able to benefit from the low rates for the next 2 years and avoid nasty surprises by making a free big overpayment in case the rates hit the roof in the future.

I know I need to get independent mortgage advice but I was wondering whether the forum can add something I am not considering perhaps.

We have permanent jobs, clean credit history and deposit. Is the lifetracker the best option?

Thanks for any advice.

K