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Original poster

which fixed mortgage?! - very undecided

26 replies

Remmy123 · 11/04/2014 06:42

Hi all,

We are just at the end of our 5 year fixed rate of 5.59 with santandar.

We have been offered the following rates:

3 years - 2.69 (no fee)
5 years - 3.29 (no fee)

We would like to think we could move within 5 years, this mortgage is portable but if you port your mortgage is it hassle free?

I am so undecided as to go for 3 or 5 years - we have a mortgage of 258,000 house worth 480,000-520,000 making our repayments on our 17.9 year mortgage around 1,500 pcm. We cannot afford any more than this and desperate to get the balance down so keeping the term we are paying nearly 1,000 off the capital every month.

I like the security of 5 years.. But the last 5 years felt like a lifetime. Then of course like everyone, I am worried after the 3 year fixed rates will be sky high.

I am usually very good at making decisions but my husband and I are in a dilemma with this, probably becuase we ended up with a very high fixed rate last time which was a big dinancial mistake... Any thoughts appreciated??

Thank you v much

Remmy

OP posts:
Bohemond · 11/04/2014 06:58

I am not sure about the absolute rates as I haven't looked at mortgages for a while - you will know this.
The key thing for me is to properly interrogate the rules around portability of the 5 year rate if you plan to move within 5 years. I have heard some scare stories of providers allowing you to port the rate to a new home but taking an early repayment penalty when you do.

NoArmaniNoPunani · 11/04/2014 07:02

5.59% for 5 years! Ouch. Are you only considering fixed rates?

InMySpareTime · 11/04/2014 07:02

How about (since you have been paying the higher percentage up to now) taking the 5 year fix, but paying the same monthly amount as you were on the Santander mortgage. The overpayments will reduce the term of the mortgage so you'll have better LTV when you come to move.
It really hinges on whether your plan to move "within 5 years" means in a bit over 3 years or almost 5. If you plan to move in 3, take the 3 year fix, overpay as much as you can to get the LTV down before moving and access better rates.

Original poster
Remmy123 · 11/04/2014 08:04

Thanks all - I prob should have mentioned that we are currently paying half the loan on interest only and the other half on repayment - as full repayment would have been a whopping 1800!!!

We may be able to make the odd over payment but the minimum is 500 each time you want to over pay - realistically I prob won't.

Porting the mortgage there is no early repayment charge unless you downsize.

I am wanting a fix really for peace of mind, and knowing that boe base rate will only rise even just a small amount I've prob missed the good trackers.

The 5 year fixed is a good deal but its a long time - then again if we come off the 3 year fix I wonder if we will get same rate again. If not we will have to pay more than we are paying now.

So confused!!!!!

Thank you all

OP posts:
Original poster
Remmy123 · 11/04/2014 08:07

....Also to add - we would love to move in 3-5 years but we have no idea if we will be able too, depends on husbands salary my salary etc... This is probably why I am in a dilemma as we are unsure whether we can definately move, our priority at the moment is to knuckle down and pay off the capital.

OP posts:
TeenageMutantNinjaTurtle · 11/04/2014 08:14

I think it's highly unlikely you'll be able to get a rate under 3% in 3 years time.

If your move will not be a downsize then the porting fees should be limited (double check). Porting should only be an issue if you're downsizing and then you pay an early repayment on the part of the loan you no longer want.

Interest rates aren't going to rocket up, but they are definitely going to rise.

I'd go for the 5 yr in your position.

We recently remortgaged fixed for 2 years because we may well downsize in the next 5 yrs so that I can stay home with the kids!

Eminybob · 11/04/2014 08:14

Why don't you ask your mortgage adviser for their advice? After all, that is what they do. They will talk to you about your current circumstances, your future plans, and recommend the mortgage which best suits your needs.
A bit more sensible than taking advice from from some internet strangers who may not have the relevant qualifications?

Original poster
Remmy123 · 11/04/2014 08:40

Ememinybob - I have spoken to a mortgage advisor, he can only advise not make my decision for me - I am a long time lurker on mumsnet and there are some very savvy people on here that give great advice, so I am getting advice from here as well as advisors...

OP posts:
Original poster
Remmy123 · 11/04/2014 08:42

Teenagemutant turtle - thank you for your help... Its good to get other's opinions

OP posts:
JuniperTisane · 11/04/2014 08:50

We are in a similar position although we don't get anything lower than 4% because DH is self employed. I think we are going to go with the slightly higher rate for 5 yrs because I'm fairly sure the rates will be going up by the time the 2yr fix ends.

We ported the mortgage last time we moved (7 years ago) with no hassle, even with a 4 month gap between owning a house. It just carried on with a second small mortgage to bridge the gap between the two amounts. When the first fix came to a natural end a year later we joined the two mortgages together and now its just one payment.

Original poster
Remmy123 · 11/04/2014 08:57

Thanks juniper - its good to hear from someone who has ported their mortgage hassle free!

Also re your rate - my friend is self-employed, she had to go through a very good financial advisor to get a good fixed rate under 4 per cent, I think she managed to get a good rate with virgin money. Worth a look!

OP posts:
JuniperTisane · 11/04/2014 12:25

Worth a look yes thank you. I'm not inclined to be very optimistic that anyone else will have us though. We got the mortgage originally on the strength of DH's business history with them over many years so they 'knew' us, so to speak.

NoArmaniNoPunani · 12/04/2014 08:28

I don't understand why my rate is so cheap then. I'm self employed and a higher earner than DH. Our rate is 2.59%

JuniperTisane · 12/04/2014 09:07

You're a better bet on paper than lots of self employed people I guess. DH's business earns enough for us to live well enough but its not good enough for most mortgage companies,

OneLittleToddleTerror · 13/04/2014 09:04

I would take the 3 years just because it's cheaper now. I was on a fixed rate for 5.99% which was supposed to finish september this year. Best thing I did was paid the penalty and left it. I went on tracker. My thinking is that if interests do rise, I can always remortgage onto a fix. The gamble did pay off because after a second remortgage we are now down at 1.99%. Monthly payment went from £1000 to £450, but we paid all the over payment into the mortgage every month. (A friend who works as in the City actually advised us to put the difference into shares. We didn't though as it seem really risky to me).

If I were you, I'll take the 2.59% and then pay it as if it's 5.59% and then see how it goes. It doesn't sound like you need to pay an arrangement fee nor an exit charge isn't it?

OneLittleToddleTerror · 13/04/2014 09:06

And we shortened the term as well. We started at 25 years when we fixed in 2019, and we are now with a 15 year term.

vickibee · 14/04/2014 16:09

We have just got a 5 year fee free fix at 3.19 with Coventry bs. I like the safe knowledge that my payment will not rise. Rates will have to go up sometime

MrsBrianODriscoll · 14/04/2014 16:14

First Direct well worth a look.

We are on 2.69 for the next five years and we can over pay even £50 here or there.

MichaelFinnigan · 14/04/2014 16:26

Would anyone on a rate around 3% mind revealing their LTV ratio

We're in the process of remortgaging

It's a bloody minefield

InMySpareTime · 14/04/2014 17:12

2.69% Nationwide 4yr fix, overpayments up to 10% of total loan per year, no fee but we have 30%. LTV, the mortgage is

NoArmaniNoPunani · 14/04/2014 21:09

Would anyone on a rate around 3% mind revealing their LTV ratio

We are just coming to the end of 2.99% for 2 years with the Coventry at 85% LTV and are remortgaging with Barclays at 2.59% for 2 years at 75% LTV.

I don't like committing to more than 2 years at a time when house prices are rising rapidly here

moneyone · 15/04/2014 09:19

This reply has been deleted

Message withdrawn at poster's request.

JuniperTisane · 15/04/2014 09:27

Yes you just move to the standard variable rate. Thats quite often higher than the fixes or trackers. It is with ours. You don't need to reapply for that, it just happens. The reason lots of people choose to refix is because its a better rate.

vickibee · 15/04/2014 11:48

our LTV is 65 % and we got 3.19 %

vickibee · 15/04/2014 11:49

With first direct you need a min salary of somrthing like 50000, excludes me! I bank with them and was turned down at the first phone call as our salaries were considered too low even though we were only borrowing one multiple of joint income. CRAZY