I’m trying to find out the percentage above base that typical tracker rate mortgages track at with respect to changing base rates. Currently 1.5 to 2% seems normal – does anyone remember what they tracked at when the base rate was higher? I’ve looked on the web and I can’t seem to find a history of average tracker rates, which is what I really want to see, to understand how it changes with base (and swap rates of course, but let’s not complicate things!). Having bought my first house in 2009, I’ve only ever known about mortgages in these times of very low rates, so I’ve not got a clue how the market changes when the rates change, other than the obvious fact that the gap between base and lending rates is generally a bit bigger when the base rate is very low as it is now, but how much by? Any pre-2009 info will be news to me, as back then of course I only knew about savings rates.
The reason for me wanting to know is that my wife and I are moving to a bigger house soon and the best 2 year fixed rates for our expected LTV are now around 1.8% to 1.9%, whereas the best tracker rate I’ve found is a lifetime tracker from my current provider HSBC at 1.99% (tracking at base + 1.49%), with a higher arrangement fee than those fixed rates. Obviously, the cheapest mortgage over just 2 years is one of the fixed deals, because they’re cheaper
in repayments and in fees too (I've worked out the sum of the two divided by 24, obviously), but in mid 2016 when those deals finish, I’m sure a rate rise will be on the cards and the rates we'll want to move to won’t be anywhere near as good, plus we'll have another arrangement fee to get the best deal. Whereas, if we go for the lifetime tracker now and accept the arrangement fee and slightly higher monthly payments, there’s no extra fees to pay in 2016 and we just continue at base+1.49%. If the 1.49% margin is a good one, then the tracker is probably the better deal (although obviously I'd do the maths on that). However, if tracker rates in a few years time fall with respect to base, then we’d be better off fixing now, taking the savings over the two years and then adopting a tracker later on when they're a better deal. I don't want to make this post too long, but obviously I'm doing the maths for 5 year fixed deals as well and also, to avoid the inevitable posts on the subject, I'm not really interested in the pros and cons of fixed vs tracker as I'm aware of those already and are taking them all into account with my sums.
So my question is: does anyone know what sort of tracker rates were common in the past when base was 1, 2, 3, 4% etc? Is base+1.49% a good deal thinking long term, and by how much?