The rate depends on your circumstances, if this is your 'forever home' and you've not got any big life changes, personally I'd take the longest fixed rate available, as rates are highly unlikely to drop much further, as the base rate shouldn't be able to fall anymore. You have guaranteed stability of payments and usually the facility to overpay by 10% a year with no penalties, so they can still have an element of flexibility. Hope that helps
If you fix for 5 years I think the repayments might be a bit higher? My son is looking at buying a house soon and I advised him to try to get a fixed rate for as long as possible, in case the interest rate rises, he said he'd seen a mortgage advisor and that the repayments were higher thr longer the fixed term. It probably varies with different Banks and Building Societies and there are sometimes penalties if you want to move/sell, or your circumstances change, for example if you're buying with someone else and part ways.
Rates are low so fix for as long as possible on as short a term as possible. The shorter the term, such as 10 years vs 25 years, the higher the monthly repayment but the quicker you pay it off and the less interest paid.
I always fix as I like the certainty of knowing what my repayments are going to be. My last fix a few months ago was for 5 years as I think rates are super low at the moment and can only go up! I have a large mortgage and my repayments would go up significantly if rates were to increase hence wanting to fix.
I can still make overpayments and the monthly payments are not much more than not fixing.
Personally I agree with the posters who say fix as long as possible at the moment.
TIP... Talk to me of fixed rates!! We have always had them (very risk averse) and since early 2000s we have obv paid over the odds 😞 We are due to get a new deal at the end of May/beg of June and we were thinking of another FR for 5 years Surely with brexit etc times are far from certain? Help!!
We fixed last year for five years. The reason being I wanted to know our exact payments (although I do now over pay). I was worried over interest rates rising (they can't get any lower) plus we've always fixed as my DH is mainly commission based so we never know how much his wage will be and I couldn't cope with the potential mortgage payments changing too.
In the past we've only ever fixed for 2 or 3 years but Brexit etc made me feel I wanted a longer fix.
Our 5 year fix ended up a bit more expensive than the 2 year fix. Given that we might end up paying another set of fees after 2 years to re-fix, it was a very tiny bit. We also entered our mortgage at a time of high childcare fees, which will reduce once kids are in school (I know they are still expensive, but I can't just say 'no' to childcare) - so knowing the payments was worthwhile for us. It depends how much risk you are comfortable with. We might I suppose be better off if we hadn't fixed, but I cant know that in advance.
As a PP mentioned, it might also depend on whether this is a forever home or a stopgap. If you had to sell up and move for some reason before the fixed term was up there would likely be a penalty charge to pay so do bear that in mind.
badders That loan website is Central Government loaning to local government. Those loans can never be repaid early without paying all of the interest as well. And as the loans are backed by Government borrowing, they are required to turn a profit so they set their rates at higher than what they know the government will have to pay. THe rate jumped a lot at Brexit and a lot at Trump but is now stable - it changes every day.
TBH those worrying about the payments fluctuating - have you done the maths about how much they might fluctuate by if base rates went up 1/4 or 1/2 percent ..... it may be a lot less than you think and not worth the fee
I have always fixed. I like the certainty of knowing the payments during that time cannot go up, I do this knowing full well it is not the cheapest deal I could get but it works for us. I have for the last 7 years been thinking that interest rates would go up and I have been wrong but I cannot see them going any lower so I would definitely looking at fixing now for as long as possible, we have just fixed for 3 years at 1.95 %. I think it's pretty easy to do a search for longer. I would look at Martins money tips for the best search engines.