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Fix mortgage for two years or five?

(11 Posts)
NewsreaderChic Tue 11-Aug-15 19:23:42

What would you do? We've been offered 2.1% for two years or 3.1% for five years. Either way we'd save a fair bit on what we are paying at the moment. The two year option will of course be cheaper, which is tempting but I don't have a chrystal ball so who knows what interest rates will be doing in two years.

museumum Tue 11-Aug-15 19:26:28

I can't see any scenario in which interest rates are lower in two years. This is the lowest they've ever been.

HippyPottyMouth Tue 11-Aug-15 19:26:55

It's always guesswork, but the indication was the rates are likely to go up soon. What are your plans? Are you planning to stay in the house for 5 years? Is there a massive exit penalty if you don't, and are there any variables on the cards that might change your plans, eg job change, more kids.

FWIW, we fixed for 5 years this time last year and
I'm glad we did. I like knowing what the mortgage will be each month, no being able to plan round it.

LIZS Tue 11-Aug-15 19:27:44

We've recently gone for 5 which gets Ds through uni , hopefully.

Orangeisthenewbanana Tue 11-Aug-15 19:28:47

Interest rates are only going to rise. If you're planning to stay in the property for the 5 years, I would take the longer term.

NewsreaderChic Tue 11-Aug-15 20:55:30

We don't plan to move, in five years time we'll have one starting her second year of Uni, one about to start her first year and one going into Year 13 - so we'd be. About to hit a very expensive time.

TalkinPeace Wed 12-Aug-15 14:25:18

Interest rates will rise - they cannot go any lower - but not by much for many, many years

MrsOs Thu 13-Aug-15 18:02:46

we fixed for 10 years a few months ago. we know rates are going to start going up at some point and I didn't want the worry of what the rates would be like in a few years. there was a great deal less than we have been paying so I just fixed for 10 years. I'd go for the longer term if you are staying in your house.

Superexcited Thu 13-Aug-15 18:08:38

I would opt for the longest fixed rate possible but I am very risk averse. I would rather pay a slightly higher rate and know that if is affordable over a longer period of time than be constantly worried about the impact of rate rises. I can't see rates going the way the did in the 80s but I can see them rising.

TalkinPeace Thu 13-Aug-15 19:42:01

MrsOs
But what did you fix at ?
because if the fix is at too high a rate you are not better off

MrsOs Thu 13-Aug-15 21:04:51

i cant remember the exact rate but it was cheaper than the tracker we have been on for ages. What we were paying before was more than manageable so i thought it was a no brainer.

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