Would you fix your mortgage for 5 years?

[PurpleFlower1983]

My current deal is coming to an end and I’m wondering whether to fix for 2 or 5 years. We don’t currently have plans to move but may do in the next few years as we are starting a family. We currently have a large 4 bed end terrace but if the right detached property came up in the medium term we would be interested. The 2 year rate is better in the short term but I’m concerned that with Brexit etc. the only way is up for interest rates.

Check the arrangement fees too, they can be really high. Make sure it can be moved to another house and the check the costs to do this too

Ring London and country brokers on Monday. They will do all the searching, no cost to you.

Thanks for that, I’ve heard good things about them.

Yeah not only do they find the best deal but they sort out the application. We’ve used them twice now and been really impressed.

My husband is a mortgage advisor and very clued up. He's just fixed ours for five years.

Just about to fix here for 5 years too

We've just fixed for 5 years. For us it's stability and no surprises. We only have about 8 years to go on the mortgage and if we can overpay on the next 5 years we will be nearly mortgage free.

No because we overpay more than 10% a and there are no limits on over paying on standard rate.
If you don’t want to over pay or at least not by much then yes I would fix.

Yes we did.

We did and massively regret it. You can't overpay as much as we'd like and meant we were restricted if we wanted to move or sell during that time.

I fixed mine for another 5 years, trying to overpay by 10% so I can hopefully get rid of it when deal ends (no limit to overpayments then). Interest rates so good

We fixed for 10 years 3 years ago. Sometimes I regret it because we could have got a cheaper rate for trackers etc over the last few years but the biggest advantage is in affordability. If we’d have done a 5 year fix, it would be coming up for renewal at the point of having 2 kids in nursery and I don’t know if we would be able to borrow enough. We’ve paid a premium for certainty but hopefully in the long-run it will have been a good decision.

You’ll need to do the maths bassoon on the IR, outstanding balance including the arrangement fees and taking your view on where rates are heading.

I recently remortgaged and was offered 1.44 for 2y fix if 1.88 for a 5 year fix.

Including the additional arrangement fees on 2x 2 year I would need base rates to rise by more than 0.5% in the next two years for the 5 year fix to be NPV positive. That is a larger rise than the is being forecast by economists but obviously it’s not a perfect science. I went for the 2 year fix.

*maths based on

yes!!! 5 years all the way... i was doing 10 but my financial adviser said dont - i might want to move

shes right - in a few years i do intend to move out of the area

You do know that expectations of future interest rate rises are built into the fixed rate you’ll be offered, right

^^ This - We've never fixed and have been better off that way for 98% of the last 20 years. Currently paying 1.1% on a lifetime tracker.

However, without the above deal, if I could currently fix for 1.88% for 5 years and had no plans to move, I would probably go for that. The actual amount of interest payable at that rate is so low, it's hardly worth worrying about unless your mortgage is huge.

I wouldn't worry about the limits on overpayments either, because you can get 1.5% on easy access, 2% or so on fixed rate savings, and 3% on regular savings, so if I had extra money, I'd overpay what I could and the rest would go in savings accounts as a 'DIY offset not to be touched other than to pay towards the mortgage' sort of thing.

We fixed for 10 years with First Direct at 2.49% - I like to know what I'm paying and was happy with this rate 👍

10 years at that rate is great, especially if you're planning on staying there.
I'm so nervous about fixing for 5 years.
I've never done that before and never stayed in one house longer than 3 years.

I'm also finding it difficult to decide if to reduce the term from 25 to 20 years. We are only just 30 so although seeing the benefit I'm wondering if I need the flexibility of having a longer term with the option of over paying if we can.

We are planning a potential 2nd baby in the next few years if all goes to plan and that will stretch finances on its own

I’m going to shop around a little, we owe 70k on the mortgage and have 13 years remaining. Bank have valued the house at 118k from their database but 4 houses in the street have sold for between £140k and £165k. Ours should reach the higher end of that valuation as it’s quite big and has been renovated recently (Northern town). If I can get an improved valuation the LTV should be much better.

We made the costly mistake of fixing for ten years in 2007, but fixed for 5 years last year. I'm very risk averse. Mortgage Broker in the family too- I would always recommend using a local whole of market firm that can give you good service. Find one that doesn't charge a fee!

Depends on how good a fixed rate I could get. Anything below 2% I'd go for. I'm currently on 1.29%.

Yes - I just have and saved myself £300 per month.

At the end of my initial 3yr fix, I was then offered good rates for both 2yr and 5yr fix, I opted for the 5yr as it helps me to budget longer term. I'd have fixed for longer if I could.