Mortgages - fix for 2, 3 or 5 years?

[PassportAngst]

Current mortgage rate is 1.79%. Cheapest fix we can get is 3.19% and it's the same rate whether we fix for 2, 3 or 5 years.

What are others doing in a similar position? Are interest rates likely to keep rising or is this just a peak and they'll slowly come back down again?

I'd fix for longer, rates have been extremely low over the last few years and the ecoomic picture looks volatile.

Five!

In my opinion the only direction interest rates are going is up for the foreseeable future.

UK inflation is at a 40 year high, similar in the US. One of the only tools the BoE has to curb demand is interest rate hikes. Rates are increasing in the US as well and messaging they will continue to. Put it this way, will you be able to afford another hike in 2-3 years when it could be 6% or more (like my first mortgage only 15 years ago) or will you be annoyed at a potential overpayment?

Surprised its the same rate for all terms. You should also consider affordability criteria in the intervening period i.e. additional children, job changes, car loans etc. and if cost of living continues if you'll get same LTV next time.

I know which I'd take although those rates are high (not knowing your circumstances).

What would you take LiquidLuck? I'm leaning towards 5 years but just feels alien as have always fixed for 2 years at a time.

Family is complete so no unexpected childcare costs to think about.

Definitely fix for as long as you can. Rates are only going one way.

I fixed for five years this time last year. I'm glad I did!

We've got this to contend with in September so watching with interest. Currently on 1.89%. If we'd been able to change without penalty before Christmas we could have got a 5 year rate even lower than 1.89.

Now it's going to be 3+% or possibly more by the time we can swap.

We did a 5 year fix earlier this year as we have a child at uni and another one who will also be going to uni so we wanted to know exactly what we would be paying mortgage wise for the years they will be at uni, hence the 5 years.

Martin Lewis has posted a video this morning about the increase in energy prices come September and the knock on effect for mortgage affordability checks etc.

For us it has never been about beating the market rate but about knowing exactly what we will be paying out for the next X number of years.

I wonder if we're with the same provider. I've just looked up their current offerings and same as you 2,3 and 5 year fixed would all be 3.19%. Even a couple of weeks ago I'm sure it was 2.8 something, they are going up fast. Wish we could swap out now instead of having to wait until sept!

5 years, 100%.

The base rate is already 1.25 so could easily go to 2 by the end of the year/early next and who knows how high after that. Either way economic predictions are official recession here and the US early next year. We won't be out of recession and into lovely growth again in 2 years, the cost of living crisis hasn't even fully hit yet. Sorry to be the voice of doom.

Just make sure you've properly got the best deal and consider a mortgage broker.

Our rate is expiring in October but we can switch rate 3 months before the expiry

Thanks everyone think we'll go for the 5 year fix

Fix for 5. We fixed at 7 years at 2.1% in April and I’m so glad we did! I wish we had taken the 10 year one but it was 3% and we didn’t think it would go to the rates they currently have! (More fool us though, I blame having a 2 week old baby).

the longest fix they offer you/ take it.

I would pick 5.

At the current time I would pick 5. It will only go up.

I'd fix for 5 years, that's what I did. Old rate ended in March (same as yours at 1.79%) and we managed to fix at 2.29% for 5 years. Rates have been exceptionally low for a very long time and I believe they'll only keep going up.

2 years at that rate that's a really bad deal.

Mine runs out in a month but have fixed again already a couple of months back. From 2.12 % to 2.69% luckily just before rates went up. We fixed for 5 years with no hesitation it feels the right thing right now it’s all so unstable and we over pay. We also have a low LTV and am trying to get it paid off quicker as I hate owing the money!

I fixed for five years 16 months ago but that was at 1.4.

Five. Avoids another arrangement fee.

5 for sure

We fixed for 5 years this year - we are unlikely to sell as only moved here 3 years ago and are hoping (we are old) that will actually be able to pay it off in 5 years even though there's 10 years to go on it.

It's interesting that they don't seem to want people on the shorter deals any more. The incentives are clearly to fix for longer.

I've been on base rate for donkeys years; didn't bother fixing for a long time. Added to the mortgage and changed provider at the end of last deal in April and did 5 year fix at my brokers suggestion, she is adamant thing are only going up for a long foreseeable. Seemed mad but we are SO glad we did.

Good timing!

Same. Ours expires end of November. So 3 months will be end of August/beginning of sept.