how long did you fix your mortgage for

[Marzipan23]

Hello,
we are currently remortgaging, heading to a 4.6% rate vs a 1.5% rate we had previously which does sting!! I'm pregnant with our first baby, we have budgeted for the 4.6% and we can make that work alongside childcare but it will be fairly tight! I'm struggling to decide if we should fix for 2 years or 5. On one hand if the rates drop and we fix at 5 then we could potentially miss out on 3 years paying a lower rate, on the other hand if they go up a stupid amount then we really will be stuck. Either way is a gamble! what did everyone else do? or what would you do if you were remortaging right now?

Interesting to see so many fox for longer. We fixed for 5 years previously (wish I'd gone for 10). Really cheap rate comes to end in July and we've just fixed for 2 years. It was not cheaper than 5 and broker was of view if rates are going to change it will be downwards. We'll have a new govt, and I'm hopeful the economy will be in a different place by 2 years.

We got lucky as the timing worked. Our previous rate came to an end before the Trussterfuck, and rates couldn't really be lower than they were then, so I fixed for the entire remaining duration.

We fixed our first one of 2.2% rate for 5 years but we have just remortgaged and only fixed for 2 years this time at 4.8% which, I agree OP, stings a tad!!

We fixed in late 2022 for 10 years and very happy we did, at current rates though we would just fix for 2 years in the hope and expectation rates will fall.

But I also think it depends on your attitude to risk. If you can just about afford the mortgage then having a guarantee of a fixed payment for 5 or 10 years may be a better option. If you can comfortably afford it and can afford for it to increase then it's a gamble as to whether rates rise or fall (although long term a fall is expected, anything can happen).

This. We have always fixed to end of a life stage (end of nursery, end of primary etc) as we valued predictability rather than saving a few hundred quid.

@Marzipan23 Yep, same as @TheOneWithUnagi for us. Fixed in 2022 just before the big hikes and went for 10 years. That should see us through our stage of having young children and nursery fees. We know we can afford that payment on DHs salary alone if I go off on another mat leave etc.

Current situation, I’d probably go with a 2year.

What is your LTV? Are you likely to reduce your income by returning part time?

Are you planning another child?

If you are a low risk in terms of LTV and you'd still pass affordability easily then two years

But if you still have five months before you start mat leave, plan to take a full year off, you could be starting to apply for a new deal with significantly reduced income.

What you really want to avoid is being unable to secure a new fixed rate deal and being forced onto standard variable rate. If there's any risk of this (especially if your age means you'd want another child fairly quickly) fix for longer.

When you chuck pregnancy, mat leave and childcare costs into the equation it is more complicated than just a guess at where interest rates will go.

I'm on France and can't get my head round how mortgages work in the England.
We took out our mortgage 15 years ago at 3.2%, the bank drew up a payment table showing how much we'd be paying for entire duration of the mortgage (30 years). The amount we pay is set (say 1000€/month), in the first few years the majority of this is is interest (maybe 850€ interest and 150€ capital) and it slowly inverts to almost all capital (at the moment it's something like 950€ capital and 50€ interest).
We did renegotiate it about 6 years ago as rates went down (we went down to 2.9% and knocked 5 years off the mortgage).
Thats pretty much how it works here, the idea that you have to renegotiate every 2, 3 or 10 years seems insane.

Ffs typos 🙄

Congrats @Marzipan23! I am in the same situation and just last week fixed for 5 years. The reason being, as I’m pregnant at the moment the affordability was only based on our current circumstances. If we fixed for 2 years, we would need to apply for a new fix when they would also take nursery fees in to account. Whilst we can afford them, I’d worry the lender would think we were leaving ourselves short. By fixing for 5 years, our child will be due to start school and we will no longer need to factor in childcare fees.

From the brief research I done, fees aren’t expected to drop an astronomical amount between now and two years time. For us we like knowing that for 5 years we know exactly what we are paying

It is similar here although it may not appear that way. We tend to have either fixed rate deals, or discounted variable rate deals. There is no negotiation during the deal duration, so you have to wait until it expires before picking a new deal.

It is, and always has been, possible to fix for a long period, even the duration of the mortgage (usually 25 years in the UK). Not many people do this though for some reason. I have always tried to as I like the certainty of the repayment amount so that I can budget. This was especially true as the rates have been so low in the previous few years that they couldn't really be lower. It was a non decision to fix for the longest possible time while the rates were so low.

Some people were unable to do this as they were already within the time period for their previous deal and got caught as the interest rates rose before they could do anything about it.

Essentially, it is all a gamble on what the person taking out the mortgage thinks is likely to happen with the interest rate. Some gamble better than others.

@workoholic that's not true. We are currently moving house and our broker has said that she thinks rates will come down and that the market is currently reacting the indicate that rates will come down. So it's not just guesswork. Obviously there are no guarantees i life but I think there are few people in the mortgage market who think rates will be as high in two years as they are now.

I’ve just been offered a 5 year deal and can’t decide whether to take it or not.

I could kick myself for not fixing longer last time, went for a 2 year term as I was convinced I wanted to get an extension with a remortgage (ha, can never afford that now!)

Knowing my luck I’ll fix for 5 and the rates will decrease, the 2% deals are an extra £200/month though.

thanks everyone! This is so helpful, to be honest I thought everyone would think I was mad for considering 5 years but I can see a lot of us are in the same boat. I think I'll go for 5 years and pay for the peace of mind and security!

yeah this is where I am! the way i've decided is; would I be more annoyed in 2 years if the rates had gone up and I hadnt fixed for 5 and had to pay an even higher mortgage or would I be more annoyed if I fixed for 5 and in 2 years they came down. For me I decided the first option would annoy me more, even though I could be fixed on a higher rate for longer than necessary at least I know I can afford that, there is no certainty how much they could go up or down!

Like pp, we fixed out mortgage at the end of 2019 for 10 years following the advise of our financial advisor. It seemed insane but I'm so glad we did.
We pay these people to take as much guesswork out of the equation as possible, so I'd definitely follow their advice rather than a "gut feeling".

If I was fixing now, I'd certainly go for two years because it's incredibly unlikely that the rates will go higher. I'm investing all I can so that I can (hopefully) pay off the mortgage before the term ends.

By the way, I was heavily pregnant in 2019. Agree your attitude to risk will stipulate what you do, but based on expert opinions it's fairly low risk to only fix for two

We fixed 9 months ago for 5 years! Got a decent 4.1%.
rates will likely drop... but im assuming over the 5 years it will average out for us. Currently we on the winning side of a low rate, but BoE rate will hopefully be lower by the end of our 5 year deal!

about a year ago, I fixed for 5 years. I did all kinds of calculations, lots of reading & thinking.

in the end, I decided the potential gain of only fixing for 2 years (then 3 years at a lower rate) if it dropped, wasn't worth the risk of it going the other way. And paying who knows how much.

i wish I'd made my mind up faster as I could have fixed at a lower rate.

but woukdnt be me if I didn't overthink things. Though thankfully it usually pays off!

Hi All,
I'm in a similar dilemma but was looking at 5 or 10 year deals. Our current 2.09 deal ends in August this year. After speaking to our financial advisor the monthly difference between the 2 new terms was £25 a month. (4.49 or 4.9) This hasn't helped my decision making.
Obviously nobody knows what's going to happen with mortgage rates, but just wondered what other people's opinions are please.
I was quite set on ten years initially but my childcare payments will reduce in a year so I will be in a position to save this money to potentially pay off a chunk after 5 years.
Unfortunately I'm rubbish at decision making!
Although typing this out has given me some clarity already, but I'd appreciate other people's views/considerations please?
Thank you

I am very not risk adverse and am minded to go for variable or maybe tracker. I can live with what happens if that turns out to be more expensive choice.

Right now, If I did fix, would only be for 2 yrs.

I've just fixed for 4 years at 3.9%. I think rates probably will come down in the meantime but this was the cheapest rate I could get at the moment.

Fixed at 2.2% for ten years in may 2022 thank god we did!

Fingers crossed for everyone for upcoming deals soon! I'm not a fan of the system we have!

hello!
we ended up fixing for 5, 10 years felt like too long to us but its different for everyone and it depends what your mortgage will go up to! I personally wouldn't fix over 5 but I would understand why you would fix for 10 given the state of the country/world. What I would consider if you are planning on paying lump sums off later is building that money in an ISA, usually you get an ISA with a higher interest rate than whatever your mortgage interest rate is, so example our mortage is 4.51% but our ISA is 5.22% so we tend to build up a lump some once a year in there and then chuck it in as an overpayment and it allows our money to overpay more than if we just paid that initial money against our mortgage, hope that makes sense!

The irony of me giving you advice when I was asking for it isn't lost on me..!