To ask if you're going to fix your mortgage because I can't bloody decide!!

[PennyAsset]

Time for me to remortgage.
I have no idea whether to fix or not fix and if I fix for how long!
Worried about Brexit.
What's everyone else doing?

I've had a Tracker for 16 years. I reckon I have saved a fortune over what I'd have paid mucking about changing every few years.

I am not concerned about Brexit. Financial institutions will shaft us all, all the time, it's what they do.

Depends on the interest rate you can get with each deal. I would go for the cheapest assuming that rates are not likely to rise much in the next couple of years. (In fact, they may be about to go down and there is a small chance they could even go negative. Alas, this does not mean the bank knocks bits off your mortgage!)

Also, you sometimes cannot tell what will work out as a good deal. We bought our house just before Northern Rock went under, at the height of the market, on a tracker. It meant that we were in negative equity pretty much straight away for around 2 years. So in the short term, it looked like a big mistake. However, because our tracker was a fraction of a percent above the Bank of England base rate, and interest rates proceeded to fall through the floor, we have paid less than 1% interest on pretty much the whole term. That's allowed us to overpay dramatically, and reduce the debt. While house prices flatlined for 2-3 years, they're now 20k above what we paid. And all of a sudden, it looks like a good decision.

Fixed for 5 years at a low interest rate. Yes the rate might fall below that, but I'd rather have security and over pay when I can.

I would really recommend reading MSE's Remortgage Guide - really helped me decide. Also recommend giving London & Country a call - they really helped me to think through the options and see what was right for me.

Sorry to hijack the thread OP! I'm reading this with interest as my fixed rate is coming to an end, we're sure we want to fix but not sure if to go for 2 years (£100 less than we currently pay) , 3 years (70 less) or 5 years (40 less). Many of the pp seem to have gone for 5 can I ask why you went with this?
Our income is stable and we are saving every month up to £500 which we're spending on doing the house up, which should be done along with childcare payments in 2 years .

Oooh, another thing that helped me decide: it's a long term decision. Of course, you need security in the short term - if you can't make the repayments, the whole thing goes tits up. But you could argue that this is a question of savings vs mortgage balance more than it is a question of types of mortgage. (You may be able to earn more on a balance in a savings account than you would save paying off the mortgage, so check!).

Also, it's a long term investment, so look at the interest that you pay over the whole term, i.e. the difference in the amount of interest you pay in 15 years versus 25 years. According to a mortgage calculator, you'll pay £76k of interest on an £180,000 loan at 5% if you pay it off in 15 years. But that rises to £136k if you take the full 25! That's £50k that you're paying the bank for that extra 10 years! If your prospects are good and your wages likely to go up, being able to reduce the term can save a fortune, so a cheaper deal that allows you to pay in more quite quickly might work well.

Many of the pp seem to have gone for 5 can I ask why you went with this?
Because some banks charge you fees for the remortgage and I didn't want to be paying that every two years.

being able to reduce the term can save a fortune, so a cheaper deal that allows you to pay in more quite quickly might work well.
yes, the term over which you pay the mortgage is just as important as the interest rate. Also see if you get any penalties for overpaying - if you can overpay, then try and do so.

There are some fab deals out there for 5-10 years some even as low as 2%. Rates will probably not be any lower but if article 50 id invoked could definitely be higher. The advantage of a longer fix is savings potentially on arrangement fees. However I would only fix for that long if you have the option of overpaying and if it is portable (ie. Can be transferred to a subsequent property if you want to move

I went for a 3 year fixed a few months ago. Seemed like the best balance between the rate and duration of the deal.

When we last remortgaged a few years ago we went for a lifetime tracker, we aren't tied in to anything and can change our mortgage if we like. I just got sick of changing it every few years.

We have done quite well with it so far as the interest rate has stayed low.

I would say tracker, we had a tracker mortgage when we bought the house, it has allowed us to overpay and clear our mortgage.

I don't see rates rising too much, I'd say a long term tracker would be the best deal.

We were only looking at longer fixes as our mortgage is relatively small, so over shorter terms any savings are wiped out by mortgage arrangement fees. There are potentially better deals elsewhere than with our current provider but with even higher arrangement fees and valuation fees too which means the savings don't add up. Half a percentage point only saves us 15 quid a month.

We've fixed for 5 years in June. I think it's almost inevitable that base rate will rise in the next few years and I'd rather know what we're paying and overpay now and hope that house prices don't plummet so we've still got equity in the house (we're at 70% LTV at the moment in South East)

It's such a tough call! Wait for Bank of England decision on Thursday (indications are that interest rates will fall?) & then decide.
7 years ago we went for a 10 year fixed (@2.99%) I dread to think how much we could have saved on a 2 year fixed now!
About to pay penalty & go for 2 year fixed I think ?🤔🤔🤔 (still not completely sure though😬🙄🙄🙄)

We've never fixed and it's always worked out cheaper that way for us. Currently on a lifetime tracker at 0.4% above Base rate. Saved a fortune over the years. Fixing also has the disadvantage that if you need to sell you may have to pay early repayment charges.

We fixed for 10 years a couple of months back.

We worked out that doing this would mean we're currently overpaying by £40 - £50 a month, not a significant amount but our mortgage is something we know we can afford. When we need to remortgage, our youngest will be 19, so we could afford a big hike at that point in time (which is why we fixed for 10 rather than 5 years).

I agree with previous posters, it depends on how much you can afford for them to rise. I know we couldn't afford a massive rise, that was really important to us.. So we fixed. However, our mortgage is portable - so we can move if we need to and we can extend it if we need to. If you can afford the rises, then you're probably better off on a tracker for now... But if you can't afford the increase, then better to fix.

We have a portable lifetime tracker.

I can't see any reason to fix with interest rates so low and going lower and the economy so fragile.

I guess I'm not so risk averse that I want to pay thousands of pounds just so I know my mortgage interest rate, which hasn't shifted in years, won't go up at some point (after it goes down).

YY doingit. It's the new normal of the economy, it seems - very low interest rates, very low growth.

Thank you very much for your replies.
Very helpful.

We're 8 years into a 10 year fix - at 5.5% .

Thank fuck it's an offset mortgage. We haven't paid any interest since 3 years in and will have it paid off soon.

It's a gamble. You have to decide whether you're happiest knowing exactly what your payments will be or would rather risk them going up later on.

Current thinking is that rates will be kept low. A hike to rates would probably ruin our economic recovery . Savers always get the poor end of that deal.

Saying that, we fixed for 5 years, Mainly due to second child arriving and budgeting for childcare etc..

Ultimatly it depends on your circumstances. I do wish I would have gone tracker, But that's hindsight for you.