Mortgage dilemma

[Jayandnoisybob]

Renewing mortgage. It’s gone up £500 per month ☹️.

My options are to take a 5 year fixed rate or to pay an extra £50 per month and take a 2 year rate.

mortgage advisor thinks go with the 5 year as rates are not likely to come down much

What would you do?

Between those 2, I'd probably go for the 5 unless you think you might need to sell within 5 years and have to pay exit penalties.
Also compare any setup fees and remember that you might have to pay another set of fees in 2 years time if you go for that.
I would agree that rates are probably going to be back to normal for the foreseeable future.

Do you need the certainty of fixed costs though? I haven't looked at rates recently but what's the best rate you could get for a discounted rate variable, then your quids in if rates go back down, but obviously not if rates go higher.

Have you considered a tracker?

We've just locked in a tracker 1.44% below SVR currently it's 5.44% no exit or over payment fees , I want the flexibility at the moment

I went for a 5 year which can be ported to a new property, if/when I move

We are vanishingly unlikely to move.

We did discuss a tracker but when faced with how much it could potentially go up I didn’t want the risk. Not totally ruled it out though.

I went for a 5YF just recently. Rates are not likely to drop like they did 15 years ago.

Personally I'd go with a tracker at the moment

I just took out a 2 year fix yesterday. I don't plan to move within the next five years but I read that they are expecting rates to drop in 2025 and I couldn't face being stuck on a hiked rate unnecessarily. Yes, I'm taking a gamble...

Can anyone tell me a bit more about a tracker and why it might be a good idea?

What is the rate on the 5 year vs the 2 year?

I can’t remember the exact rate but it equates to £50 more per month

I'm in the same boat. I can do 2.3 or 5 year. I think he said the 5 year one was 50 pound cheaper than the 2 year one or 40 pound cheaper that the 3 year one. I've chose the three year one but I'm just not sure. I can still change my mind. Got till end of November. I'm just so worried il choose the 5 year one and rates will drop. 5 years is a long time!

I listened to some economist say that rates would start to fall in about 3 years. Who to believe 🤷‍♀️

We just started a new 5 year fix this month. We maxed our term to 28 years and 6 months to get the lowest monthly repayment possible. We will be able to overpay about £500 more per month, but it gives us the flexibility to reduce our outgoings atm - I'm half way through maternity leave.

I guess it depends on your circumstances and how much you value having certainty over your outgoings. In 2 years, if you had to pay more, would it change your decision?

A tracker is just a type of variable rate that is guaranteed to rise and fall in line with the Bank of england rate compared to a standard variable, where the lender is free to raise and lower the rate as they want.

Economists can predict all they want but if they last few years have taught us anything, it is that we really don't know what the future holds, so if you think you would struggle to pay significantly higher rates, I would stick with a fix.