Mortgage rates - to ask if 2yr or 5yr?

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Can I ask what people are doing lately fixing for 2 or 5 years please? Due to remortgage in April and not sure what to do really… be good to see what others are thinking..

So hard to call!
My sense is that the base rate will hover around 3.5 to 4%.
Interested to see what others think.

I think it depends on your personal circumstances and how risk averse you are. I've sometimes gone for a longer fixed due to knowing I'll be able to afford it or be then at a stage where I'll have had a pay rise or be thinking of moving house so the circumstances were in the mix. I also value stability which means I'd normally favour a longer fix.
My fix finishes in the autumn and for the first time I'm contemplating a tracker mortgage because depending on circumstances I cant control I may need to downsize within two years in which case a tracker with no exit fee would be beneficial however I will also only have about £63000 left on my mortgage at that point which would mean BofE rate rises wouldn't be as large as if I had a bigger mortgage.
Rates are predicted to drop over the next year but only a small drop. I think if I was in a home I intended to stay in for the long term I'd be going for a 5 year if affordable because that would give me longer term stability and to me that's worth paying slightly more over the next few years.

"What's everyone else thinking" is not the right way to approach this question.

Important questions would be things like:

• How important is certainty of payment to you? The more you need certainty the more a 5 year fix appeals.
• How important is flexibility to you? The more you need flexibility the more a 2 year fix appeals.

What you definitely shouldn't do is start second guessing what might happen to interest rates in the next few years. Who would have guessed in 2007 when rates were over 5% that by 2009 they would be 0.5? Who would have guessed in 2021 when rates were 0.1% that by 2024 they would be 5% again?

It's only your own financial situation that matters.

I'm going for a 5 year so I know exactly what payments will be and so I dont have to do paperwork in 2 years.

Often the fees to set up wipe out any small gains in interest I find.

Im also very, very admin shy, so this works for me.

I’ve just fixed for 5 years - monthly payment is slightly higher than our previous 5 year deal but there wasn’t a lot in it between the new 2, 3 or 5 year deals.
I have recently had to overhaul our finances after a worrying period, so I wanted the security of our payments staying the same and, most importantly, within our budget, for the foreseeable, without having to worry about the hassle of switching again in 2 or 3 years time.
We have no plans to move and our income is increasing, going forward.
Personally I can’t see interest rates dropping dramatically within 5 years.

We brought last summer and fixed for five years.

The payments are the high end of our affordability so any rate increase could force us to sell. As we are renovating we wanted the security of knowing what that payment was for five years, rather than risk selling a half finished house.

In five years when we remortgage our LTV will have changed affording better rate tiers, we may have had pay increases etc. If we have to sell, at least the house will be finished.

If we’d been more comfortable with the mortgage payments, with a larger cushion of comfortability, or hadn’t viewed this as a long term home, for example been younger with the potential to relocate for work, or growing our family so might need more room, then I’d have gone two year. Forecasts are they may drop slightly but really, nobody actually knows.

It is down to personal circumstances.

I’ve just gone with 2 years mainly because this was a divorce remortgage and I’m expecting (hoping) in 2 years time interest rates will have come down a little (mine is Fixed for 3.98%) I’m also hoping to bring the term down in 2 years time - had to go with 25 years which is way longer than I’d like but hopefully 2 years of pay rises and paying off divorce debt I’ll be in a better position in 2028

We are due to remortgage this year, going for a 5 without doubt.

I’m going for 5 years on my new house. Mainly cause I cba doing it all again in 2 years

2 years for me. A bit like a pp, we should be in a better financial position in 2 years, and I doubt rates will rise in that time. Next remortgage I plan to shorten the term a lot.

I wouldn't fix at all. I'd wait it out to see if rates decrease.

I would go with shorter whilst they are expected to keep falling. Personally though I’m going for 3 year next time as in the 4th year after the fix has ended I can pay it off.

Personally... I dont think much will happen and I do generally prefer a fix.

So id be looking at arrangement fees and seeing if that moved things much. (It is unlikely to)
I'd probably go for 5 yr...but i might be tempted to do a 2yr followed by 5yr instead depending on the offers available.

We only went for a 10 yr back in the day because the 5 yr arr. fee was £750 and 10 yr was 1k and I am lazy and I hate having to do insurance and things like that. Phew! Dreading needing to do it in a few years

Last month I fixed for 5 years at 4% but my husband is out of work, we have one kid at uni still and another due to go this year. Plus, we have some debt from DH's employer going under (and not telling anyone so DH was accruing expenses which then didn't get paid). So, although I know rates may yet fall further, we need the security of knowing what the payment will be until we are out the other side of current events. Saved just over £100 a month on the two year fix we've just finished with.

Recently fixed for 5 years at 4%. My thinking was that although rates will probably drop a bit further they are unlikely to go lower than 3% in the next couple of years, whereas you never know when world events could push interest rates unexpectedly high. So the certainty for 5 years felt more important to us.

Just fixed for 2 years, but planning to overpay as much as possible during that ti.e.

I did 2 year fixed a year ago on a really high 8% as it was a cascaded score mortgage not perfect credit history. We can lock in to a new deal this July and I’m going to do another 2 year fixed. If you read all the reports etc rates are apparently going to hit a new low by this September.

Have just fixed for 5.

Coming off the back of an emergency divorce 6% Liz Truss mortgage and keen to avoid that sort of absolute shit show again.

(Also, Trump isn't going to stop causing global danger and I don't want to need to find a rate at the same time he eg invades Wales or whatever. Sounds flippant but is a genuine worry)

Ive just gone for a 2 year fix!

We just did 5 years for this exact reason

Lots of good advice here, let me add:

Mortgage rates don't follow interest rates. It's all about the bond rate.

Our first mortgage offer in 2022 was around 2.7% before everything went to shit. 95% LTV.

In Spring 23 it was 4.89%. Same LTV.

I checked 2 days ago and 95% LTV is now 0.31% cheaper. In almost 3 years, it's only fallen 0.31%.

If folks are anticipating large rate falls, I would disagree. I don't think it's going to get much better than they are now.

I have also been keeping an eye on the rest of the market (60% LTV, BTL mortgages, etc) and all banks seem to do is rob Peter to pay Paul, constantly, every month. So one day your buy to let may go down by 0.3% but suddenly you find FTB rates shot up by 0.15 and so have remortgages at 60% LTV.

Two year fixes (at 90% LTV) versus five years - something like 0.5% in it? Not to be sniffed at. But you will pay x3 lots of around 1k setup fees over six years if you keep doing that. More often than not, five years are cheaper just because there is one fee. Last time we did the sums (umm, 18 mths ago maybe?) the rate would have to go down by 1% to make a 2 year worth it.

Best to add up the entire lump sums including any fees including repeat fees then divide by a years to compare total annual amount, imo.

If I had an offer in now, I would go for 5 years, basically because of the instability I think Trump is causing. It was only 2-3 years ago that interest rates were 11%, and that all started with an invasion and the price of bloody oil too.

So now he's invaded Venezuela which has, surprise surprise, a lot of oil. God only knows what's going to happen with oil supplies if wars keep breaking out everywhere. But, one thing is for sure - when the price of oil spikes, EVERYTHING across the world spikes in costs because most things get shipped.

I just dislike his fuckery and I see a lot of political (and therefore financial) uncertainty ahead of us.

We're due to remortgage soon & I'm going for 5 years fixed for that peace of mind & certainty that we can afford it. We will also be coming closer to paying it off, so we're hoping to overpay to finish it early.

Very true.

I do think we are in a harder to predict than usual world at the moment, and the pp who mentioned Trump still being around in 2 years has a point. However... no denying that some people need more flexibility than others and some need certainty. It's worth thinking critically about which one you are.