Boring - mortgage

[Dollygirl2008]

So my mortgage advisor has come back with some renewal options but I'm torn between 2 year fixed rate, 2 years or 5 years - can I ask what you would do?!

I fixed for 5 years - on a high rate due to it being an adverse lender so about 5% but TBH with the way interest rates are, I'm happy with that

Our 7 year fix is at 2.79%. Finalised that a couple of weeks ago.

How did that rate compare to the 2 and 5 year deals?

It really isn't. I asked for advice, 40 odd replies. I didn't ask for the advice on interest rates - just the terms. But thanks for your helpful comment

What do you even mean the terms?

I'd also go for 5 at the moment. What's the percentage?

If the base rate goes up to 3% next year, as predicted, then mortgage rates will be closer to 5%.

I think we've got a serious amount of financial turmoil heading our way over the next few years. You are better placed to ride it out if you know what you're paying each month.

@longtwrn It was a fraction higher (can’t remember exactly how much), but we wanted the certainty to take us to the end of our mortgage. Our previous fix was five years which has just ended and the new repayment is lower so it’s swings and roundabouts. We will carry on over paying so we won’t notice any change.

Take the five - stability is everything right now

Just fixed at 5 years. This is despite knowing we plan to significantly upsize further and move at 4 years. This takes into account that the ERC on the final year drops to a minuscule figure - or - of course no ERC if we ported the mortgage to our onward purchase. Either way 5 year fix made masses of sense given the way interest rates are going.

Sorry to jump on your thread but we currently only pay 0.25% above interest rate. We where one of the lucky ones who Alliance and Leicester messed up the terms of our mortgage so we where advised at the time by a broker to not change our deal. Now with interest rates going up im wondering if this advise still stands. Im clueless about all this sort of think despite paying a mortgage for 15 years

Go for 5 even if you plan to move. We fixed at in 2020 and moved house and the mortgage in 2021.

Interest rates have gone up for 5 months in a row and we are in for many more hikes as inflation is at between 9 and 10 percent and they want it down to about 2-3 percent. Take the 5 year fox.

If someone was buying a house now for £200k how much more will they be paying for every half a percentage the rates go up?

I guess it means both affordability of finding a house in that price range and cost of repayments is a pressure right now.

Thing is there is no point in holding off, as long as it remains affordable, as based on this thread the rates are only going one way. So maybe best to find the best rate and fix for as long as possible.

1. Lock in for as low as you can at these decent rates. The world could have gone to absolute hell in years time.

It's quite straightforward to port your existing mortgage and take out a smaller one if you move. That's what we did.

If that was me I'd stay on that deal. Interest rates are currently 1%, so you are paying 1.25% however, people are saying on here that the cheapest they can find is 2.79% which is more than double.

Can you look at what your payments would be if you did fix and just over pay by that amount? Would help with budgeting going forward with the interest rate increasing?

Sorry interest rate is 1. 25% so you are paying 1.50%

This would be better as a separate discussion.

I agree that you should fix for as long as you can. Interest rates can't go down much from here, but they can go up a long way.

www.mortgagestrategy.co.uk/analysis/historical-interest-rates-uk/

A 10 year fix would be good if you can get it without paying too much extra.

www.theguardian.com/money/2022/jun/18/10-year-fixed-rate-uk-mortgages-value-loans-deals

But, from the Guardian article, "if you move house, you might find you no longer qualify for the loan and need to repay it and take another", so you may want to take advice on that for any longer term fix.

We've just fixed for ten years. We reserved the rate a few months ago and transferred across last month. I've never seen ten year rates so low.

I had the option of 2, 5 or 10 years fixed. The advisor was pushing for 10 but I agreed to 5 as I expect things to be better in 5 years. Also a lot can happen in your personal life in 5 years.

I plan to start overpaying each month, even if it's a small amount like £20-£50 as every little helps.

My 5 yr fixed is at 1.89%. I didn't shop around though so there may be better deals out there.

I think the interest rate depends on the LTV.

What was the rate?

We just bought our new house a few months ago and fixed for 5 years at 1.29%. Rates with same bank now 2.94% so glad we did

we are planning to try to pay off a whack at the end of our 5 year fix (if mortgages rates haven’t come back down by then)

id probably fix for minimum of 5 years as long as you’re not thinking of moving in that time