Urgent - remortgaging would you go for a fixed rate for 2 or 3 years in this current climate?????

[MilaMae]

We've got 1 income and the offer we thought we had has said no as dp has 4 dependants(me and the dc). Dp has found an equally good one but with a bigger fee for 3 years.

There is the loan to value thing to consider which mortgage companies seem to be focusing on more now.

I want to get the forms off tomorrow as getting twitchy,nobody seems to give you any advice, I appreciate it's our decision but just wondering what others would do.

What rate have they offered you?

if it's a rate you feel good about then 3 years. If it's a scary one but you're making the best of it - then 2 years.

5.95

What's the rate and what are the arrangement fees on each? TBH the difference between 2 and 3 years is not probably going to make or break your finances either way.

Bear in mind that if you go for 2 years with a lower fee you will have to pay anther fee in two years for the next mor[tga'ge.

It would be £500 extra for the 3 years.

5.95 isn't bad - don't think you'll get a better rate any time soon. I'd be tempted to go for the 3 years, so that at least you can budget around it.

You're not likely to want to move in 3 years though, are you?

Sorry, I meant before the 3 years is up

We're bursting at the seems so yes but will not be able to until the credit crunch ends as can't go up a rung of the ladder.

Two years if you really want to fix.
I reckon interest rates are going to go down rather than up, so a tracker might be better.
We've just had an offer on a two-year tracker at 6.19%.

The loan to value thing is worrying us though as if house prices plummet (which lets face it is looking likely)the loan to value thing will be a problem. Apparently companies are going with this more now.

we have to remortgage soon and I am looking at trackers in the expectation that rates will come down next year, but its pretty nerve wracking!

LTV is a BIG problem. We've been through three mortgage companies before we got our offer. The valuation surveyors devalued the house we're buying and the mortgage companies would only lend us 75% of their valuation, not the purchase price.
All the criteria are so much more strict at the moment.

we have fixed for 3 years at 5.89 %

bad if rates go down, but we need the security if they go up ! and knowing what our outgoings are going to be for the next 3 years.

5.95 is not bad at all. IMO it is pointless to worry about whether rates will go up or down. What is really important is, can you afford the repayments? If the answer is yes then I would probably choose the stability of the longer fix.

Most mortgages can be taken with you if you move house, so check if this will be the case with yours. Also check they're both the same in terms of ability to overpay/underpay etc.

Thanks all you've been a great help,think we'll go for the 3 .