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Original poster

Should I fix my mortgage for 2 yrs, 3 yrs or not at all….

16 replies

FrontForward · 30/05/2014 15:37

I have part of mortgage on SMR and part on BMR (3.99 and 2.5%)

If I fix around 2 yrs I'll pay approx same per month but be locked in (good if rates rise quickly and of short duration … but bad if rates are slower to rise when I'll be coming out of deal just when they are on the rise)

Longer fixes give longer security but paying more than I do now.

What advice do you have?

OP posts:
strawberrypenguin · 30/05/2014 15:39

Only based on what we chose to do but I would fix for as long as you can if you can do it at a reasonable monthly rate. Interest rates will very likely rise in the next year or so

Original poster
FrontForward · 30/05/2014 16:10

All the longer ones have a booking fee and the rate is higher than I'm currently paying. I agree with you but am finding it very hard to do this!

OP posts:
noddyholder · 30/05/2014 16:15

I would fix for at least 3

LIZS · 30/05/2014 16:17

as long as possible .

PervyMuskrat · 30/05/2014 17:24

Could you afford your mortgage repayments if rates rise or would you need to sell up?

We fixed for 5 years 18m ago as we wanted to TTC DC2 and we wanted to make sure we could afford the mortgage and increased childcare costs. The rates on fixed rates have dropped since then so we're worse off than we would have been but it has allowed us to budget for the next few years, which is important to is right now.

Quodlibet · 30/05/2014 17:28

Mortgage advisors will try to get you on short fixes as they get their commission more frequently that way. For me the security of a 5 yr coupled with not having to worry about proving my affordability during childbearing years made a longer fix make more sense.

SwedishEdith · 30/05/2014 17:28

We've just fixed for 3 and I'm half wondering if we should have gone for 5 now It depends on the size of the mortgage really

MissMysticFalls · 30/05/2014 17:41

We've gone for lifetime tracker. 1.99 percent over base rate. No fee now and obviously no fee later because we won't be arranging again (it's portable). Our logic - we're on one salary and passed the new affordability tests if the payments increased by 4 percent. We are reliant on the bank of England which will only increase each quarter, in small increments, if at all, rather than the whim of a bank with shareholders to keep happy. We're overpaying when we can and setting aside in savings to be prepared for rates to rise. But I would fix if we were on two incomes and the monthly payment was a bit of a stretch.

Original poster
FrontForward · 30/05/2014 18:35

I've just come off a fixed rate which was higher than the variable rate I'm now on. Payment came down by £200 per month so I'm very reluctant to tie in again however I can see it makes sense

OP posts:
alemci · 30/05/2014 18:43

I would fix. we fixed at 2.99 I think last year. you know where you are.

itsnothingoriginal · 02/06/2014 20:36

We just fixed for 3 yrs. Wanted 5 yr fix really as longer the better due to economic uncertainty but was a big jump in the IR and about £80 more per month than fixing for 3 yrs.

Good luck, the new criteria are a massive pain to get through!

TalkinPeace · 02/06/2014 20:57

I've always had trackers
but I got my first mortgage when rates were 15% for a while ....
and my last tracker was 0.5% above base
current one is 2% above base

Mini05 · 02/06/2014 22:19

We fixed ours last feb for 3 years 3.99%. We looked at the price and knew that it was fine and we could do it with no problem.

I'd say look at the overall payment, if you can afford it without it leaving struggling
Do it

I'd set the years in with what I worked out I could pay per month without struggling and set it for that.

BumWad · 02/06/2014 22:23

We fixed last year 3 years for 2.54%

If you overpay a lot then I would do a shorter term. As you will have a higher ltv when your fix ends.

BackforGood · 02/06/2014 22:26

Like Talkin - trackers have always worked for me.
Can't see the point in paying more interest than you have to. If you can afford to pay the higher amount each month, then set up a standing order to a savings account, and you'll soon either have a 'buffer' if the interest rates shoot up several % points (which I can't see happening) or you can use it to pay a lump sum off your mortgage every now and then which again, will save you £££ in interest.
Can't see that it makes sense for most people to chose to pay more interest than they have to.

wonderstuff · 02/06/2014 22:36

I've just gone for a tracker, when you add on fees then compare the total cost of a fixed against likely interest rate rises they work out very similar, the bank will be trying to get the same money from you whatever, interest rate rises will be gradually. We should be better able to afford rate rises in the future than now, with all the other moving costs to pay.

I've always preferred a tracker, even if you do beat the bank with a long fixed and a significant rate rise you're in the position when it ends of potentially having a sudden significant rise rather than adjusting to a gradual increase.

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