Hi
I can release 72000 equity from my home and these are the 2 options I have availiable to me.

A two year fixed rate currently 4.49% carries a fee of £499 and carries a 3% early repayment charge.

A tracker at 3.19% valid for properties with a loan to value of 75% or lower and it is the Bank of England _base_ rate plus 2.69% for a maximum of 5 years this has a £999 booking fee, there is no early repayment charge on this.

I just cant decide betweent the 2, i'm basically paying £700-00 security if i go fixed and the tracker doesnt move.

I think I may go with the tracker as I can pull out at anytime and I will want to do so when my main mortgage ends. Its 5 year fixed and finishes in July 2011. I can then lump the sum together and hopefully shop around for a better deal. Where as the Fixed for 2 year would lock me down to November 2011 so my main mortgage would be on a variable rate for 4 months while I waited for the 2 year Fix to finish.

But I am a worrier, so the fix will help me sleep better at night..... Argghhh!

Any advise would be very appreciated..what would you do?

Thanks!

Dave

There is no right answer here, you seem to understand the difference between the two and the relative merits of one over the other.

The basic question is do you want to pay a premium for the luxury of a fixed rate and the security that comes with it, or do you want to take a risk with the tracker option.

Without a complete understanding of you circumstances nobody else can offer any real advice.

The most important question I thin you should ask yourself is....

can you afford the repaymentts if they increase over the next couple of years?

..... as you face the risk of this happening if the _base_ rate increases, and it wouldn't surprise me if, when the _base_ rate does go up, fixed rates increase too. So calculate your payments on the current tracker rate, and then do a few more calculations assuming rate increases, see how this affects your repayments, and see how comfortable you are with it.

Not sure how helpful this is, but withgout a full factfind I can't really offer you better advice.

This goes for anyone else in a similar situation, it is not necessarily an easy decisions, and if full & complete advice is what you need, speak to a mortgage adviser. Also remember that the larger the loan, the bigger an impact any interest rate changes will have on your monthly payments, so those with large mortgages should be particularly careful.