3 or 5 years?

[Ginevere]

Just looking for some quick advice!

We’re about to renew our mortgage, and can get the same rate over 3/5 years. Does anyone know which would be better to go with?

My instinct is to go for the longer term, what with COVID and brexit, as who knows what will happen, and the idea of renewing into an uncertain market in three years makes me nervous. I also like the stability of a guaranteed rate for the next five years.

I do wonder though if I’m shooting myself in the foot by tying myself in for longer? Are there any money heads smarter than me who think three years is the better deal?

The three year has no product fee, which is an added bonus. However, I am also very recently pregnant, so this is my last chance to get a mortgage without dependants. Any advice much appreciated.

Personally I’d go for 5yrs. Interest rates are at historic lows not seen for over a generation. The chances are that they will stay the same or go up.

yep - I'd go 5 years, especially if a child or two maybe on the way

Thanks both, that’s confirmed what I was thinking!

I would go for 5 too.
We just had this choice too and only went for 3 because we are thinking of moving in a few years & there was a fee if we exited early.

Did ours recently and for the first time went for 5 years. Planning to overpay which will mean can clear in 7 years.

We went for a five year recently, no plans to move in the short term and we were offered a very good rate, I like the stability for longer term financial planning. Ours has penalties for anything more than small over payments but we've decided to invest any extra in a low risk way and use it at the end of the term when we take our next mortgage (or maybe to get that kitchen extension....)

Thanks all. We are definitely staying put as we deliberately bought a big enough house to stay in, rooms for kids etc. And the plan is to have a couple of kids in the next few years. I also like the stability as a I am a planner.

Our plan is to overpay a lump sum of 5-10k each year (bonus allowing) and then hopefully save enough to replace the kitchen around year four, so we should have overpaid a decent chunk, plus raised the value, by the time the five years is up.

Looks like the consensus is 5 across the board which is very reassuring, thanks all!