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Original poster

If tyou were taking out a new fixed rate mortgage right now, how many years would you go for?

35 replies

nkf · 05/08/2013 06:57

Two, three, five or 10. It seems to me that with interest rates this low, the only way is up. Genuine dilemma. Want to see what others think.

OP posts:
financialwizard · 05/08/2013 07:01

Depends on if you are planning move, etc. I would never recommend longer than 5 year fixed. A lot can happen in 5 years.

ihatethecold · 05/08/2013 07:06

5 maximum

Original poster
nkf · 05/08/2013 07:09

I agree with 5 maximum. But, is five too long? Might be moving in five years. Or after five years. Certainly within 10 years. Time goes so quickly.

OP posts:
DorisShutt · 05/08/2013 07:22

We did a 5 year last time - and it's a portable mortgage so it's not an issue if we move.

Ours is with Nationwide.

Fridayschild · 05/08/2013 07:41

Two or five. Bizarrely three is more expensive than both. Personally I have always felt happiest with two.

cakeL · 05/08/2013 07:41

5 years! Ours is portable too, fixed at 2.49% could have 1.99% for 2 years but then 2 lots of fees and uncertainty if similar products available in 2 years as agree time goes so quickly! Having the extra 3 years fixed lets us not worry. We remortgaged from a 2 year 3.75% fixed so 2.49% is huge improvement. Anything could happen though!

MaryPoppinsBag · 05/08/2013 07:55

We've just took 2.
Ummed and arred over it but our financial advisor reckons interest rates will stay lie for next 2 years, in time for us to fix for 5 next time.

ajandjjmum · 05/08/2013 08:00

We had a three year fixed on the basis that interest rates had to go up! They obviously haven't, and we're now saving around £100 on the mortgage payment each month, by sticking with the current rate.

Hasn't 'someone' said that rates are not likely to increase for a while yet, as there was beginning to be quite a lot of press speculation of an imminent rise?

Original poster
nkf · 05/08/2013 08:07

The remortgaging fee is an issue. Every two years, having to shell out £1k. Very annoying. The mortgage is too big for me to be blase about interest rises. But five years. It does seem long. But even if I was to move, you have to allow about a year to sell and buy. So, maybe it isn't. I will be moving at some point.

OP posts:
RedHelenB · 05/08/2013 08:43

i went with a 10 year fix which will have cost more BUT as I wanted to know how much i would be paying each month & I was n't in permanent employment it made sense.

Snowgirl1 · 05/08/2013 08:48

We've just re-mortgaged and went for a 5 year fixed rate. The longest we've had previously is 2 years, but with the interest rates so low at the moment there's only one way I think the interest rates can go.

noisytoys · 05/08/2013 08:49

I am going for 5 years next month because its the highest fix my bank do, but I would prefer 10 years just for the peace of knowing what the payments will be.

Oodelaranana · 05/08/2013 08:49

Just gone with a 2 year fix, mostly because I might be in a different loan to value rate by then which makes a difference. I don't think interest rates will go up for at least 3 years and then they'd have to creep up gradually to avoid another collapse of the economy.

leeloo1 · 05/08/2013 09:11

If you have to pay 1k fees then definitely look into getting a longer term fix. For a 2yr fix £1000 in fees will effectively add £41.67pm to your repayments, for a 5yr fix only £16.67pm, so it makes a big difference.

Have you asked your lender if you can take the mortgage with you if you move? (As someone said above, this is called a 'portable' mortgage). Nationwide are very good for these more flexible mortgages - if you move somewhere more expensive then you keep your existing mortgage term/fees etc and take out a second mortgage (with the same company) for the additional amount at whatever the best rate is at that time.

Also shop around to see if you can get a mortgage elsewhere with lower fees.

Original poster
nkf · 05/08/2013 09:14

It's portable but I will want to be decreasing rather than increasing the mortgage. Even then, it's sometimes worth payiing the penalty fee for the amount saved in interest. I think it is. That's another sum.

Have driven myself mad trying to read up about what interest rates are likely to do. Useful thing, the Internet but it does lead you down some odd byways.

OP posts:
carolinemoon · 07/08/2013 21:09

We've gone for 5 years rather than 3, and I suspect in 3 years time we will regret it when the svr is lower than our fixed rate (low deposit). But we want the certainty of knowing how much we are going to pay, and hope to build up some equity by overpaying, which is more likely over 5 years than 3. If we had a higher deposit I would go for a shorter fix, as would feel more comfortable about getting a good rate in a few years time. I hate the fact that it is essentially a guess/gamble which we may win or lose!

Monty27 · 07/08/2013 21:11

It would depend on the rate for me.

That is what the security is. It's never going to go minus rate is it. It really only can go up from where it more or less.

Monty27 · 07/08/2013 21:12

*is

Original poster
nkf · 07/08/2013 22:01

Thank you for all your responses. I decided to go for three years because it was a lower rate. It meant my payments would be considerably lower, so I could tackle the capital. I might regret not going for 5 year fix, but then again I might not. I agree that it is awful that we have to take such a gamble. That's why I've decided to go for paying it down as quickly as I can. It's so stressful and I am grateful to everyone who gave up some of their time to share their thoughts.

OP posts:
Talkinpeace · 07/08/2013 22:29

In the USA the standard is a 30 year fix ....

Monty27 · 07/08/2013 22:48

Are you doing a 'repayment'?

mejypoo · 08/08/2013 10:43

This reply has been deleted

Message withdrawn at poster's request.

WitchOfEndor · 08/08/2013 10:48

Looks like interest rates aren't going to shift for a few years so why go fixed rate now?

DocMarten · 08/08/2013 10:56

I have always fixed mine for 5 years at a time. Just cake up for renewal and the variable at the moment is so low that I am risking staying on that month by month and overpaying my mortgage with the excess. As soon as any hint of a rise, and |I shall be fixing again for sure.

DocMarten · 08/08/2013 10:57

came not cake (wishful thinking)