How long are you going to fix your mortgage for?

[MontanaView]

Our current 3 year deal ends in September.

Trying to work out if we should fix for another 2 or 3 years, hoping that rates might have come back down by then, or should we just fix for 5 years and enjoy a slightly better rate now and know what we'll be paying longer term? We don't intend to move in that time.

What's everyone else doing?!

Mine ends at the end of October so I can’t look at the rates quite yet.

I’m going to look at the difference between the 3 and 5 year rates. I’d prefer a 3 year, but if the 5 is significantly less I’ll go for that.

Can I ask why you prefer a 3 year?

Partly because I don’t want to lock into a 5 year if rates are at their peak and partly because I’m not sure whether I’m going to stay here for 5 years (I know I can port the rate if needed, if I don’t move to a new build). It’s really the combination of the two factors that makes me prefer a 3 year.

If rates look like they are heading down, I would be tempted by a tracker, then fix for a long time when they are low.
https://www.bbc.com/news/business-65237286

5 years from next July then it's paid off

I wouldn’t rely on the IMF to decide what you do. I listened to this being discussed on a radio show today and none of the experts agreed with that forecast. I think I’d fix for three years. We elected to go for five years a year ago and I now think we’d have been better to have gone with three.

I am applying for a mortgage to get necessary repairs done, looking to fix for 10 years (and hopefully pay back in 10 years), I know I may end up paying more but it makes sense because I am a single parent so I need to know what I am paying out.

We fixed about 18 months ago for 10 years. It might not suit everyone but works for us and will be paid off then.

I have just fixed for 5 years but regretting it now!

I'm going to fix for 3 years, just bought on a 95% mortgage so wanted to buy ourselves a bit more time to pay it down as we're at higher risk of negative equity with a high LTV. I think rates will come down but not that soon - and nobody has a crystal ball on these things. All you can do is make the best decision you can based on the information you have available at the time. It's all too easy to look back and say to yourself 'I should have done X'. Just own the choice and do what's best for you right now.

Our remortgage is Oct. So will be on the hunt very soon. Hopefully looking at 3 yrs....and hoping we can get sub 4%!

3 years if you can get it

Because you think the rates will come down soon?

We always do 5 year, ever since we bought our first house. The Peace of mind of knowing what we will be paying has always been worth it, even when rates dropped slightly so we were paying a little more.

We are fixed until 2026 at 2.19%

We are due to remortgage in July and our current company will do so for 4.56% this is £250 a month more than we are paying now - tight, but manageable.

I'm hearing conflicting advice - a lot of people (family) believe we should go to variable as the rates are allegedly 'about to drop'. I'm not so sure of this myself.

🤔

I'm in the same position, really difficult to judge at the moment. We will probably fix for 2-3 years but I'm tempted to go variable (never done so before). 5 years feels too long for us personally so unless it's a good rate I'd not fix for that long.

5 years as I prefer to know what I will be paying for a longer time. Plus there is a fee every time you remortgage, so the less of those the better. I have no idea if rates will ho in or down, so this gives me peace of mind to plan.

@MontanaView

When I was weighing it up late last year I looked at the interest I'd pay between 2 & 5 years if rates dropped to zero in the final 3 years (which they won't) but that's realistically the most I could lose by fixing for the additional 3 years and I decided that it was worth it for peace of mind.

I think they'll come down by the 2 year mark, but who knows, so I'd rather have the security of knowing I can afford it.

I have just fixed for 10 years because I can't afford to increase as a single parent and I can just about manage the current rate.

I could regret it but I felt I had no choice because my mortgage is based on benefits and so I can't get one from the high street and won't be able to afford the huge cost of mortgage broker again in 3 or 5 years.

It could be the best or the worst financial decision I ever made and I know it will hurt if the rates drop and I'm paying unnecessarily £100 - £200 more than I need to each month. I guess it's the price to pay for a life-long disability and single parenthood.

If you are extremely risk averse then definitely fix. If however you think that rates will come down then go on a variable rate. Most economists believe rates will come down.
Fixing now may mean that you are fixing at peak rates.

I'd not decide now but nearer the time, I'd look at the inflation rate, and decide whether to track for a bit as the interest rate is likely to decline further as inflation rates decline, and then look to fix as the long term interest rate forecast should in theory improve.

Plus there is a fee every time you remortgage

Not necessarily, there is usually a fee rate and non fee rate and you do the maths to see which works out better.

I'm risk averse and like to fix long, but I would not be fixing for 5 years right now, whilst no one can predict the future everything is pointing at rates coming down in the near future, IMF have said this week our productivity is too low to maintain high rates post inflation.

I don't have the stomach for variable or trackers. Whether I'd do 2 or 3 I don't know, it would depend how comfortable I was with the rate, if it was comfortably within my affordability I'd probably do 3 years for peace of mind in the hope high inflation is resolved by then.

There is for me as I can't access online mortgages and brokers don't come cheap!

@SpringHasSprungAtLast loads of brokers don't charge fees, nor are they mandatory, you can get brokers that charge a lifetime fee of around £500 too, I don't understand what you mean by not being able to access online mortgages though. Recommend a lifetime broker if you are needing one though.

It's because some benefits related mortgages aren't offered on the high street. It's a real problem. I'm talking about I've got medical retirement and disability benefits, not your usual universal credit which is accepted by the high street.

My broker was £1000 per mortgage and I needed it twice so went for the 10 year option. There was an additional £4K but I opted for higher rate as I didn't have the £4K up front.