Fixed rate mortgage - 2 yrs or 5?

[SuperBunny]

Am about to apply for a mortgage but am not sure if I should fix the rate for 2 yrs or for 5. How do you decide?

I think getting a 5 yr fix is wise as the next few years could be rocky

yes, we fixed for 5 years 6 months ago, so while we are paying more in these few months as things have declined recently - interest rates are surely about to start rising and I wouldnt want to be dealing with that and the thought of having to get a new mortgage in 2 years should rates rocket.

I am banking on the idea that altho rates will inevitably move up they cannot go too high for at least a few years. Economy seems too fragile, unemployment too high - a lot of people would be in big trouble and risk losing their homes, businesses could not get loans etc if rates rose too high. That's just intuitive as I don't even pretend to understand economics. Hopefully, I'm right.

I think that's what a lot of economists are saying too maggiethecat.

Gaelic, I wish I could take comfort from what the economists are saying. I regard them as highly as weather forecasters at the moment.
But there has to be a strategy and ours is that while we do have a breather in mortgage payments we will make overpayments (not equal to the full saving) and try to reduce capital. Even if rates do go up then we should not be burdened by massive increases at that time.
We shall see.

I think rises will be sharp once they get the initial soft rises over.The QE has only been stopped for one month and already the bans are floundering and the B of E are saying they may need to re start it.It can't go on forever though as the bans need to rebuild without treasury help.In 2 yrs I thinks rates will still be low ish but mortgages harder to come by as house prices are already starting to fall again after a brief temp boom.At least with a 5 yr fix you have some certainty and whoever is in govt it will be clearer how things are going I can't see that being the case in 2 yrs

oh for a crystal ball

I know it would be nice!

I hope you are all right - I just got an off-set flexible mortgage with no tie-in. Good rate, affordable monthly payments atm and can change to fixed rate any time I want. Am hoping it was the right decision. Eek.

it might be an idea to get some professional advice (I am an independent mortgage advisor) that way they can search the market for you and save you a lot of time and effort - and we are usually free as we get paid by the lender!! x