To ask what you’re doing about your mortgage?

[Franklyfranky]

my 2% fix expired last December, enter massive rate shock as my repayments went up by £550. Dh was insistent rates would come down so we went for a 2 yr. the 2 yr expires in October (funding tranches) and I wish we we for a 5 year.

i can’t really justify paying the erc on the deal to move to a 5 yr now which would be about £1500. I’m hoping things calm down But given where rates are heading… womp womp

those whose deal is ending this year, what are you planning to do? I’m debating a PT to a tracker

Mine ends in May, I've been saving up through covid whilst I was on cheap rate and putting down a lump sum meaning I can takes 5yr fixed mortgage and I'll be done. So for me I'll just be fixing it for 5yrs even if there is a chance rates go down since I don't have much left to pay off it will only mean s having of £20 a year. Hardly worth it.

The This is Money website is really good for predicting mortgage trends.

Have just fixed for 5 years at 4.44. could have got it a fraction lower but it wasn't worth paying the product fee. I want the certainty of a fixed payment. Interest rates may drop but I doubt they will go lower than 3%.

We overpay every month and fortunately can afford to carry on doing so at the new rate. Haven't reduced the mortgage term as it gives us the flexibility of dropping the overpayment if one of us loses our job. But in 5 years we should be able to reduce the term then, if all goes well.

Before RR Autumn Statement they were supposed to bring going down twice at end of last yes and 4 times this year. Inflation has gone up the last 2 times. At one point it was 1.7, now it's 2.6. I think it will go up again.

Yes v strange gamble. The prevailing view was that there was a new norm. Should have gone for 5 year before.

We are also lucky and locked in a low rate (1.4%) which lasts until March 2026.

We’ve been overpaying and hopefully the balance will be low enough that it won’t impact us too much when we come to the end.

We should at that point be within 2 years of paying it off….so we may not fix at all but obviously that depends on what we are looking at regarding rates.

If your rate has gone up and you can afford to overpay then it's worth looking at. The mortgage overpayment calculator on money saving expert is handy - it's very satisfying seeing the interest and years you can knock off your term. Even a small amount helps.

If I was you, I'd do a 5 year fix.

It's not gone down in over 10 years (beyond the odd little dip) so not worth the gamble. Nothing will get cheaper, food, fuel etc.

If you can afford it now, you'll be able to afford it in 5 years (pending no health or job issues). If you fix for 2, you have no guarantee for the next 3 years.

Plus, we are less than 1 year into a 4 year Government term. That will see you into the next election and the rough wobbly year of bedding in.

I think that’s a fair assumption especially post festive season and with all the pay rises

The other way I see it, fixing for 5 years, the worst that happens is you pay more for the borrowing but it's an amount you can afford.

If you fix for 2 years and rates go up, you may not be able to afford the increase.

I'd rather be out of pocket and write off the money id spent over the odds than out of a home I can no longer afford. The pros of stability outweighs the cons for me.

We can pay a bit about £150 extra a month, but the difference will be negligible by October, I don’t mind too much if rates go up and bottom out again to roughly where we are now, still would be about £150 a month cheaper

Right I think my erc is 0.5% so about £1200. Do I do it now and get into a 5 year fix, my monthly payment would come down by £150 a month…? Or do I play the waiting game and worst case go to an erc free tracker, think the Margin about br is 0.25%

@Franklyfranky I'm sorry I didn't mean to sound judgemental or superior. I know trying to choose is a nightmare. It's just there has been no political certainty.

Don't forget in 2yrs your capital will be less so any increase in rates will be slightly offset. Unless they increase dramatically which i doubt will happen.

I know nothing really about finance, so I had a look at MSE to see what he was predicting the general trend would be.

Our 5yr fix at 2.4% ends next month, we've gone for another 5yr at 3.7%. There were slightly lower rates on shorter term fixes, but what we've gone for is only £100 a month dearer and I'm very risk averse. I know we can afford an extra £100, so I'm happy with the security of knowing we're ok for the next 5 years.

No it wasn’t the prevailing view, the curve still shows we’re on a downward trajectory interest rate wise, it’s why the 5 year and 2 year deals are priced as they are with 5 year cheaper than 2 and why 2 yr and one year deals are more popular now, people don’t want to be locked in for a higher rate for longer

You’re golden don’t worry :)

Forgive my input but there's zero benefit in over paying when the mortgage rate is so low..you're far better putting any extra money in a 4-5% saver then paying the sum + interest off at the end of your fixed term. Makes no sense at all to overpay now unless can't trust yourself not to spend the savings I suppose

My 2 yr fix ends October this year, I think due to tranches of funding I’m assuming, went from Jan 24 til October 25

Hasn’t Rachel basically all but bankrupted us and she’s going to have to do something that’s going to cause even more issues, ie more tax or spending cuts? Surely inflation and interest is going to raise,

id fix till labour come out of power.

Electricity cap has been raised so it will go up again.

It’s ok though because the prime minster unveiled his new plans for AI….

I hear this all the time with people complaining when they took out just about what they could afford I always based my mortgage repayment on a 7% basis because I thought "well these rates have been so low for so long they have to go up sometime" and just incase they did I planned for it, it's honestly crazy to me people could not see this and more shocking now they are complaining about it.

Yup if agree that's what I've done earning £900 interest every yr whilst the savings rates are high. Now coming to end of my fixed term I'll be pulling out and paying off a chunks so I can be mortgage free in 5yrs. Using the interest money I made for holidays 😁