Boring mortgage questions- sorry!

[Ispentitwithyou]

Hi,

We are in the fortunate position of buying our first home and just have a couple of things i needed you wise mumsnetters opinions on!

We will pay roughly the same on a repayment mortgage as we currently do on rent. Obviously this is great for us as we will finally have something to show for the amount we pay however was wondering how long you thought we should have our fixed rate for? Are interest rates likely to change soon?
Would it be a benefit to have it fixed for a couple of years only? Or the max?

Also,this is a dream home for us but feel that we may have paid slightly over the odds..was this a really bad time to buy? The road we have bought on has seen the biggest increase in house prices in a long time,but it was just the right time for us generally...

Any opinions appreciated

Fixing interest rates when you first move and are likely to have other unexpected costs is always a good idea, imo.

Also depends how risk adverse you are, plus depends on the rates you have available to you.

Be aware you usually pay a higher fee for fixed rate.

Thank you for replying, I think you're right about fixing as any more would stretch us tbh...suppose that's going to be the big difference between buying and renting!

Rates are likely to go up eventually - when is the $64m question followed by how quickly & how high. How much extra per mth is 1% increase etc

I think the answer to your qu is it depends on your circumstances and short term plans

I fixed for 5 years on my first mortgage (2004) coz I liked the certainty & knew my salary would increase as I qualified thereby gradually increasing disposable income.
Last year I took the v low variable rate & a lifetime tracker because I knew for now a lower monthly repayment suited due to maternity leave & childcare as well as knowing that rates were likely to increase so a 2 year fix would mean uncertainty and having to pay fees again but there isn't a single right answer

Uuumm... Interesting points twisted.

I'm worried we have bitten off more than we can chew long term,not that we couldn't pay the mortgage but just that we wouldn't have much disposable income at all if interest rates increased dramatically.

However DH is getting a pay rise soon (was hoping that could be savings but that might be wishful thinking) and I may soon increase my own working hours(do minimal at the mo as SAHM with toddler) so you're right when you say each family is different.

I think most importantly we are out of renting and into our own home.

If you're worried about future disposable income with rate rises but comfortable with current repayment amount then fix longer-term or peace of mind. Quality of life/experiences/days out/holidays important too imo.

Also depends where in the country you are. I think we overpaid for our house (sealed bids, time pressure of new baby on the way & not uch else that we liked available & selling our flat in less than a week) but we're on outskirts of London & liklihood of losing money long term is remote.

I wouldn't worry about overpaying for the house if you are in it for the long haul and love the house. An extra few thousand spread over the years won't be too much of a problem. There is likely to be a downturn at some stage but if you don't need to sell that will be irrelevant.

IMO interest rates will stay where they are for a good while yet, and when they eventually go up, they'll do so very slowly in slight increments.

No one knows with any certainty what will happen though; you need to make the best judgement you can at the time.

We fixed for 5 years as we know that by then DS will be in school and if the rates have gone up massively then, we should be in a better position to deal with it as the childcare bill should be a bit less.

Rates may go up, I imagine they won't go down. When? If you knew the answer to that you'd be a rich woman.

Bowlers - agree on interest rates. Had to defend my position to HSBC mortgage guy repeatedly though so get lifetime tracker not 2 year fix.