End of fixed rate

[corriequeen1431]

My fixed rate ends soon. I am struggling to decide between a two year fixed rate of a 5 year fixed rate. Any opinions?

I just came to ask the same question! Leaning towards 5. Rate is 5.79% with monthly payment of £858 up from £641. Urgh.

I went for five as I can’t see much getting better in the short term and there is an election due. Mainly though, I know I’d regret not going for 5 years if rates go up in 2 years more than I’d regret fixing for 5 years (which I can afford) at seeing rates go down slightly.

Glad I've found this thread as I've come on here to get some advice. Our fixed rate ends at the beginning of January. We've had a letter from our lender saying our payments will go up by £630 per month if we don't do anything. I was wondering if we should do this for a few months to see if the rates will come down before deciding on whether to fix in a 2 or 5 year deal. Reading these replies though makes me think we'd be better to commit as soon as possible but like others have said, everything is such a gamble and it's so much money!!

Quite a few lenders have 3 year deals, worth having a look at that?

I'm currently torn between 2 and 3 year. The 3 year is £60 a month cheaper but a few sources now say they think rates will start to drop by end 2024.

Same. I can’t see rates going down to what I’m paying currently for a few years (if ever) and wasn’t offered a bad 5 year rate so I thought 5 years was the better option.

I'm going to go against the grain here and say I wouldn't touch a 5-year at the moment and would either go on a tracker or lock-in at for years tops. It's difficult though so it would probably help to get the advice of a broker or IFA.

*2 years tops

Just got a mortgage and went for five years as I am paying it by myself and need to know what I am paying for the next few years due to uni and other kid costs. If there’s 2 of you and your incomes may improve, I’d probably look at 2 years or risk a tracker. I note petrol has been going up in price again, so I’m not sure the inflation rate will definitely be better when they next report it.

OP this is a really good forum where mortgage broker's do Q&A's - they won't obviously tell you what to do but they will offer really helpful advice:

https://forums.moneysavingexpert.com/discussion/6190962/mortgage-broker-ask-me-anything/p1

I went for a 5 years fix and it starts September the 1st. Admittedly, it is lower compared to what it is on the market now as I locked in a few months ago.
Still, I'm not convinced the rates are going substantially down in the next 2 years so no point fixing for 2..

I went for five. Much as I would like rates to go down, the fix I got is in line with the longer-term average, and although we've got used to much lower rates I'm not necessarily expecting us to go back to those anytime soon. In my case, though, the difference between my current rate and the new fix is only £90 a month anyway; if it had been a high amount I may have looked at it differently.

Personally, the likelihood is that I'm going to go for a ten year fix at 4.99% with Nationwide. 4-5% has been about average over the last few decades so I don't think it's that unreasonable and I'm worried about hopping from 2yr deals that are nearer 6% in the mean time. I'm sceptical that we'll see very low rates again for a good while.

We went for 5 years.
Previous rate was 1.79% with Nationwide and we went for 3.94% with NatWest
New mortgage started a few months ago.

I’m struggling to decide what to do also. Our fix of 1.09% runs out end of Feb so any new rate is going to be much higher. There is a high chance we will be immigrating next summer so that is making our decision tricky as it’s not 100% otherwise we would have paid an ERC and got a new fix a while ago. A few months on SVR will really sting but might be necessary if we definitely sell up and go. 😫

Mortgages often come with arrangement fees that get added to the mortgage, usually around £1000. It's worth bearing this in mind when comparing total costs for the fix period. If you go for 2 year fixes, you're potentially adding £1000 to your mortgage every two years.

I keep reading that you can lock in a rate and then change your mind nearer the time of your fix ending if the rates ar e better, but I think from the t&cs we would still have to pay the 1k product fee if we back out!

Fun fact

I am the broker who started that AMA

@forgotmyusername1 Oh wow! Well done for starting that, I referred to the thread A LOT the last time our mortgage was up for renewal

Mse booted me off. Shame as that thread seemed to do a lot of good but there you go.

It kind of blew up.

I am with Nationwide and it clearly states with them that the product fee would be refunded.

My mortgage expires end of Feb 24. Just signed up for 5.99% two year fixed to start from March with the option to cancel if rates somehow go down before then. I don't want to be tied to longer than two years in the current climate with the rates so high.

We went for a 3 year as couldn’t decide so split the difference.

Ours was up in July though and managed to get it locked in in April. We went from a 1.09% to a 4.09% which weekend horrendous at the time but I looked yesterday and if we were changing now we’d get 5.79%.

it’s so bloody hard to know though, in hindsight why the fuck we didn’t fix in for longer 2 years ago when rates were ridiculously low I do not know.

we went for 5 years @ 4.06%. kicks in from nov.

Just changed to a 3 year which started this month - 4.74% but we've had that locked in since March, but if we had waited then we'd be paying well over 5%.

We didn't want to do 2 year as I don't feel things will come down that quickly but 5 years is a risk in case things do come down before then and we didn't want to risk overpaying if they did.