2 or 5 year fixed mortgage?

[Gonnaeatalotofpeaches]

What length fixed mortgage are people going for at the moment? We are due to remortgage at the end of the summer. Our 1.2% rate that we locked in back in 2021 is coming to an end- we have been very fortunate with that rate.
It looks like our mortgage is going up about £600 pcm at the moment.
I know no one can predict the future but what is everyone doing at the moment. 2 or 5 year rates?

We fixed for 5. We know we can afford that, and we won’t be paying nursery fees by the time it comes to an end, which would be a bit of extra buffer should rates go up.

We went for three to hedge our bets. Out of 2 and 5, I'd probably go for 5 for the security.

We will be doing a tracker

we have just fixed for 5

We did 5 - just prefer the certainty of the cost & we, like you, were lucky with a very low rate previously & didn’t get hit with the high rates a couple of years ago. With such geopolitical uncertainty 5 years seems sensible.

Interesting. 5 year is slightly lower rate as opposed to 2 year being the cheaper option last time we remortgaged.
Our property is now a rental as we have moved out of area. Our consent to let is ending with the fixed rate so we are going up to 5.5% with a buy to let. We have had to extend a couple of years on the term to get the rent to cover the mortgage.

Wouldn't it be great if the mortgage rate was the same for everyone, fixed for the duration of the mortgage, say 4 per cent for 25 years.

I would be surprised if rates were as high as they are now in 5 years time. I’ve been wrong before!

I’m in a similar situation, dropping off a 1.13% 5 year fix, but am in the position of being able to overpay quite significantly. So my plan is try to keep the ongoing payments as low as I can make them (eg by extending term) but make sure I can then overpay heavily without penalty (with some flexibility for surprise expenses etc).

So for me, I’d opt for whatever got me the right mix of low mandatory payments, with overpayment flexibility.

@TheKittenswithMittens it is actually pretty much that way in the country we live in at the moment. However we are far too poor to buy here!
@Dissimilitude this is some good advice. I will check out overpayment on the deals we have been offered.

We have just come off a very low rate 5 year fix and remortgaged for another 5 years. Everything feels so uncertain at the moment so I wanted the stability of a longer fix.

I do a 2 year so I can reassess. I hate to be locked into a bad deal. That worked for me 2 years ago. Obviously I fixed for longer in the past when rates were very low.
I also don't stretch the payments over a long term only to overpay. The way I see it, a shorter term is simply less interest over time. You need to make sure you can afford it, but I want to pay off my mortgage as quickly as I can.

Exactly the same here!

Also consider the product fee, ours was £999 with hsbc

@literallyevery this is a good point because it’s a buy to let mortgage now our product fee is £2000.
We did try to sell this property last year but it ate so much of our savings paying the mortgage while waiting for the all the paperwork to be sorted because it’s on an unadopted new build estate we gave up.

I bought my house almost three years ago.

I went for a 2 year mortgage through a broker but when it was due to be renewed I chose 5 years for peace of mind. I stayed with the same provider/broker and there was no fee to pay.

@Greenwitchart we unfortunately can’t do that as high street banks won’t lend to people who live in the EU- we must go to specialised brokers with their own extra special fees haha.

We usually do two but I look at all the options at the time. I still regret not for going for the rare 10 year deal at 1% offered a few years ago. I didn't appreciate how good we had it back then!

We just fixed at 3.1% for 3years.

Well I was going to go for 2 years, as I have a 10 year deal ending soon, but my building society are currently offering fixed interest with no overpayment penalty, so I might go for longer.

Same! Ours was 1.6% for 5 years and I regret not paying a bit higher rate and fixing for 10 years but I suppose none of us has a crystal ball.....we didn't know if we would be in our house that long and wanted a bit more flexibility but with hindsight it would have been the best decision.

We've fixed for 5 years on 3.8% so monthly payments have gone up but are still manageable and we just wanted that certainty because the world feels very uncertain at the moment.

We fixed for 5 years, went from 1.6 to 4, but payments stayed the same, as we have been overpaying, planning for an increase. Before we moved, we were on a lifetime tracker at .5 above base, so I miss that mortgage.

I went with 2 as am hoping the rates might come down…