Mortgage- 3 or 5 years?

[Pammela2]

We need to remortgage by the end of the year and so are looking at getting a deal in place and then will re assess after the BoE meeting in November.

First question is: do all lenders have the time period before where you can cancel the agreement in principle and move to a better deal? We’re looking at Santander but are currently with nationwide.

There’s not a huge difference in rate - 3.9 for 3 years and 3.68 for 5.

What would you do?

We are in the same boat and no idea whether to fix for 2/3/5 years. Not much help I know but replying in hopes it bumps the thread 🙌🏼

Yea, it’s tricky! I think we’re going to lock in a 2 year one and then potentially check again after the meeting of BoE in Nov.. and maybe get a longer one depending on what happens.

Its not up until the very end of the year, so that gives us enough time to keep assessing!

I would go for 2 years personally (you've said in your later update that's also an option). I don't see the benefit of fixing a higher rate for a longer period at the moment.
However it completely depends on your risk aversion and headroom - how easily can you afford it if rates were back at 5/6% in 3 years? And how important/appealing is the idea of a guaranteed payment amount for the next few years? More likely rates will be coming down but who knows what could happen.

And as for your question my understanding is that you are not committed until you drawdown funds and you should be able to switch deals until then.

For that reason it's usually best to apply early.
However getting various applications in with different lenders will be making a mark on your credit score, it's best to stick to one lender at the outset but move deals from the same lender if they release a better one.

Ah exactly our plan! We are doing quite a bit renovation so need to pull out some equity and will need to add a 2nd charge on. It’s weighing up whether we just borrow it all now at 5% or wait and see if in 1 years time the rates have dropped so we can borrow it on a 2nd charge at (hopefully) 4%!

We went for 5 yrs in a recent application with a similar rate to yours. In the three days over last weekend we pulled all the supporting paperwork together that deal worsened again by 0.06. We know we can afford the monthly payment and as we are stretching ourselves slightly to afford a forever home, we wanted to go for security over the odd chance we might be slightly overpaying, if rates were to come down significantly. Our broker said he cannot imagine the 1-2% years to return any time soon and to take a good rate when we can.