Fixed mortgage 1.94% ?

[Anitai]

Hi all,

I’m hoping someone can help with our current mortgage situation.

We’ve been offered a mortgage at 1.86% fixed for 2 years. However if we can get to a LTV of 85% we would qualify for a mortgage product of 1.64% fixed for 2 years, or 1.94% fixed for 5 years.

I am leaning towards fixing for 5 years but I’m not sure if this is the right move.

Can anybody help??

Interest rates are going nowhere for a few years. If you fix for a long time you can take out a cheaper fixed rate if your LTV drops in 2 or 3 years. I would go for 2 years.

I would have taken someone's hand off for that, but our fixes were at 10.8%, 7.4% and then 5.7% over the years. I think you usually pay more for the longer fix, but I normally went for that so I knew what the costs were.

It depends on your personal circumstances. That's what a mortgage adviser is there to help you determine.

We've just fixed for 5yrs at 1.65%, i like the certainty with a long-term fix and think at the moment banks probably won't drop rates much even if the rates drop more so shouldn't be losing out much and in 5yrs we should be around 30%ltv as we're having work done so should get a good rate then even if rates are high. I think you have to base your decision on your circumstances - house prices, job security future dc plans ect

If you pay a fee for every fix then fix for longer as it saves money in fees. I would fix for 5 years in your situation as it not. Much more in interest and 2 years goes really quick.

Thanks everyone, you’ve all given me something to think about. Unfortunately Im still in 2 minds though.. think I’ll have to think about it for a few days

If you have no plans to move house or remortgage for at least five years I would probably take the 5 year fixed rate.

Obviously you could still move house whilst in a fixed rate, however your options are more limited.

Therefore if you are pretty sure your circumstances are not going to change at all, I would have 5 years security to take us through Brexit. None of us know what the rates will do during this period. They could go up, come down or remain stable but I would want the security.

as above - fix it longer
i considered 10 years fixed but i was moving way before that!

We’ve decided to hold on to the 7k required to get to the 85% LTV. On our current LTV we can only fix for 5 years at 2.24% .. I think we’ll probably stick to 2 years at 1.86%

A fix depends on your circumstances. I usually think younger people who might want to move, miight marry etc are better off only fixing for 2 years otherwise there are massive penalties if they then wants to move or remarry duing year 3 etc. If you think you are set for life have a husband and family and stable work and won't need to move and want certainty then you could go for the 5 year fix.

remembering the days when we had a house and bought 2 buy to "lose" flats (sold at 50% losses in the 90s in London ouch....) and we had a home loan at about 16% + so I fixed a loan for one of the flats at 13% for 10 years and thought I had the deal of the century - ONLY 15% interest. Then of cousre rates went right down to 8% and we were stuck at the 15%.