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Original poster

Fix for 5 years or 2 years variable???!

81 replies

Cake4 · 04/11/2022 21:32

I know I know another mortgage one, everyone is sick of it.

But what do I do?!

I know none of you have a crystal ball, and it's my own decision etcetc but any advice?

I read online one minute, interest rates have peaked. The the next is interest rates to rise over the next 2 years.

What would you do take the variable at about £850 a month or the fixed at £1100?

£1100 is near the top budget I can manage, so should I just stick with this incase it gets worse?!

OP posts:
noproblemifnot · 04/11/2022 21:42

What are exit fees like on the variable?

Luckydip1 · 04/11/2022 21:43

This is not such an easy decision at the moment with rates so high.

Original poster
Cake4 · 04/11/2022 21:45

noproblemifnot · 04/11/2022 21:42

What are exit fees like on the variable?

Would need to double check, but I believe there are none.

OP posts:
Original poster
Cake4 · 04/11/2022 21:46

Luckydip1 · 04/11/2022 21:43

This is not such an easy decision at the moment with rates so high.

Literally!!! I feel like taking the risk. Making sure the variable one has no early repayment. Then I can always change if things get worse?

OP posts:
alwaysmovingforwards · 04/11/2022 21:54

Nobody knows. It comes down to you assessing what's you think is best for you.

Rowthe · 04/11/2022 21:57

All the news is saying rates may come down.

But if you can afford I thi k it's best to fix.

The other option is to get the offer quoted, is there a date they hold your offer for?
E.g. is it valid for 6 months?

So if rates go higher for the next 6 months you still have that offer.
What is the SVR if you aren't on any special rates?

Original poster
Cake4 · 04/11/2022 22:09

Rowthe · 04/11/2022 21:57

All the news is saying rates may come down.

But if you can afford I thi k it's best to fix.

The other option is to get the offer quoted, is there a date they hold your offer for?
E.g. is it valid for 6 months?

So if rates go higher for the next 6 months you still have that offer.
What is the SVR if you aren't on any special rates?

Svr is discounted at 2.99% for 2 years. Then surely I can just get a new discounted deal with another provider fixed or variable.

I could look to hold the mortgage, good shout.

Although I hope to move by the end of Jan.

OP posts:
Original poster
Cake4 · 04/11/2022 22:09

alwaysmovingforwards · 04/11/2022 21:54

Nobody knows. It comes down to you assessing what's you think is best for you.

Thanks 😫😫😫

OP posts:
Furries · 05/11/2022 03:11

Do you mean a tracker? I’d be surprised (at least with my mortgage Co) if their SVR was better than their fixed rate.

My fixed is due to end mid-2023 and, for the first time ever, am considering a tracker rather than fixed.

Original poster
Cake4 · 05/11/2022 05:37

Furries · 05/11/2022 03:11

Do you mean a tracker? I’d be surprised (at least with my mortgage Co) if their SVR was better than their fixed rate.

My fixed is due to end mid-2023 and, for the first time ever, am considering a tracker rather than fixed.

Yes sorry it's a discount tracker.

OP posts:
Cantshakeit · 05/11/2022 06:18

My mortgage broker has advised a 2-year tracker Iver a fixed. Lowest fixed I could get is currently around 5.5%, whereas the tracker is now around 3.75%

QuebecBagnet · 05/11/2022 06:19

If you can afford the fix then fix. Yes, you might end up spending more than you needed but that’s better than the alternative.

christmas2022 · 05/11/2022 06:25

Tracker sounds good.

Most people wouldn't have considered them over the last 10 years as they weren't necessary with such stable low rates.

With the wobbly economy at the moment, the tracker looks quite attractive. The benefit of this is that if you fix paying £1100 for two years and then the rates drop you're stuck.

Original poster
Cake4 · 05/11/2022 06:26

Cantshakeit · 05/11/2022 06:18

My mortgage broker has advised a 2-year tracker Iver a fixed. Lowest fixed I could get is currently around 5.5%, whereas the tracker is now around 3.75%

Good to hear, just shows how speculative it is.

Mine has advised fixed for 5 years. I was swaying to agree with your mortgage broker to be honest.

I guess our situations are all different

OP posts:
Original poster
Cake4 · 05/11/2022 06:27

QuebecBagnet · 05/11/2022 06:19

If you can afford the fix then fix. Yes, you might end up spending more than you needed but that’s better than the alternative.

Good point. 5 years just seems like a long time. But the 2 year fixed is even more!

OP posts:
Original poster
Cake4 · 05/11/2022 06:28

christmas2022 · 05/11/2022 06:25

Tracker sounds good.

Most people wouldn't have considered them over the last 10 years as they weren't necessary with such stable low rates.

With the wobbly economy at the moment, the tracker looks quite attractive. The benefit of this is that if you fix paying £1100 for two years and then the rates drop you're stuck.

The one I was looking at was 5 years, as the 2 year tracker was loads more.

I agree with you though.

I guess everyone is having to think of things slightly differently. I have always had fixed.

OP posts:
Dinoteeth · 05/11/2022 06:30

My mortgage guy advised years ago never to go fixed. The banks will always fix at at rate they believe with all their experience and advisors that they will still make money.

If you decide not to fix, 1100-850= 250 put that £250 into savings, to try and build yourself a buffer zone.

Original poster
Cake4 · 05/11/2022 06:37

Dinoteeth · 05/11/2022 06:30

My mortgage guy advised years ago never to go fixed. The banks will always fix at at rate they believe with all their experience and advisors that they will still make money.

If you decide not to fix, 1100-850= 250 put that £250 into savings, to try and build yourself a buffer zone.

I am swaying towards the variable. It's more than a 2% difference in interest rate.

The one I'm looking at has no wary repayment, so if I needed to get out asap I could.

I also only work part time, and will be looking to increase this over the next 12 months. So I would therefore be able to take the hit (within reason).

Especially as you say, if I try to build a buffer too!

OP posts:
christmas2022 · 05/11/2022 06:38

@Cake4 I have always fixed too. Never been on standard variable or tracker.

But the times are different now so I think the options for mortgages need to be different too.

Witsendwilly · 05/11/2022 06:40

Luckydip1 · 04/11/2022 21:43

This is not such an easy decision at the moment with rates so high.

Lol. Rates are still low, and have been incredibly low for the last few years.

Welcome to reality, those of us who have been around a while are just seeing things creeping back to what we would consider normal.

Original poster
Cake4 · 05/11/2022 06:41

christmas2022 · 05/11/2022 06:38

@Cake4 I have always fixed too. Never been on standard variable or tracker.

But the times are different now so I think the options for mortgages need to be different too.

That's a good way of thinking about it.

I guess the 2 year tracker is the most as that's the sensible option, fix for a small period and hopefully everything will be slightly better then.

5 years, slightly cheaper as you are probably going to be paying more than needed to get through a rough patch.

Variable... take the risk!!! Have a good/better rate.

OP posts:
WonderWoop · 05/11/2022 06:41

OP what would happen to the tracker if rates go up more - I.e. how much do rates have to go up by to get you to an 1100 variable payment? That's the data point I would use to make my decision

BeesAndBirds · 05/11/2022 06:44

My only concern with the variable is thT it sounds like you can't really afford for rates to go much higher than the fix you're being offered.

I think paying a bit more for security outweighs potentially losing your house.

Although you say you will be increasing your hours. Is this a definite, or is there a chance your employer wouldn't let you take on additional hours? If it's a definite then I would probably go for the variable.

Faultymain5 · 05/11/2022 06:45

Is there no fixed for three years at a smaller repayment than at 5 years. Three years should see you over the worst of it and may be just in time for rates to be a little lower. But even if they’re not you’re likely to have cut into some of the equity so it balances out.

Faultymain5 · 05/11/2022 06:47

Also rather than a tracker (thinking Of mortgage rates in c1989) what about capped then even if rates go up, it won’t go above your threshold and if it’s flexible and you can afford it, you can overpay to your threshold so after the deal ends you’ve eaten a bit into your equity.