Mortgages: fixed or not? Overpayments? Interest rates? etc

[tentative3]

Just made an offer on a house, and trying to decide what to do mortgage wise. We are not porting our current mortgage.

The house we've offered on is intended as a long term house but we are aware that things can change so not sure whether to consider a 5 year fix or not. We have previously had 2 year fixes, and that would be fine but wondering whether that will be a long enough fix to ride out any potential economic issues on the horizon. Does anyone have a handy crystal ball to make predictions on what might happen to interest rates in the next 5 years? We're not married to the idea of a fixed rate at all, either.

Also, does anyone have recommendations on providers who have low or zero overpayment restrictions? I can and will do some research myself, but already know I don't want to go with Santander again as their minimum overpayment is £500 and I'd prefer something a little lower.

Basically, talk to me about your mortgage provider and whether they're any good I guess!

Can you contact a broker? They’ll be able to give you much more reliable advice than you’d get from a forum

We had a broker and he took ALL the stress out of the mortgage application process. Talked us through our options, what would be best for us and gave us loads of info around which providers would allow us to overpay/take a mortgage holiday.

FWIW, it sounds like a 3 year fix might be a good option for you. We’re in the middle of a 5 year fix with Nationwide and their rules around overpayments are pretty flexible - we sometimes overpay £50-100 a month when we have the money spare, and you can overpay up to 10% a year (I think)!

Interest rates have never been lower so a 5 year fix seems like a good idea, plus it means that you are not having to pay another product fee in two years, and another in four years. I believe nationwide is a max of 500 a month, their rates are always pretty good.

5 year fix is what I'm planning for on my next move.

I'm currently with HSBC and they allow 10% overpayments per year.

We've just fixed for 5 years and with the savings (lower % and just dropped into the 60% LTV rates) we are now able to over pay £180pm.
Martin Lewis has various mortgage calculators and I spent ages messing about with different % rates and fixed terms to see what worked out best for us.

5 year fix is what I would do. We make a regular £100 overpayment on our Santander mortgage.

Thanks all. Yes, we could definitely approach a broker! I just wasn't sure if they would be want to include overpayment options as a criterion! Nationwide sound good if they don't have a minimum overpayment. Max of 10% on a fixed rate seems standard and is far more than I anticipate us being able to make so that's not a problem.

Definitely speak to a broker, they can indeed look specifically at products that allow overpayments if that's a priority for you.

worth mentioning that there is often some additional terms in the small print about overpayments.

the headline of our mortgage is that we can overpay 10% per rolling 12m period which we knew about upfront and wanted to make use of. however we subsequently found it that if you make an overpayment that is less than three times your monthly contractual payment, this doesn't come off the 10% allowance. so say you have a windfall/win the lottery, its better to split the payments into slightly smaller amounts so that you don't risk an overpayment fee.

Is that a new thing with Santander? I don’t have that limit on my mortgage, I’ve overpaid £50 before.

I'm with Nationwide too and previously had a 4 year fix and could overpay up to 10% a year, I used to pay a few extra hundred quid a month. I specifically asked about it when I was getting my mortgage sorted (I was a FTB then).

I'm currently on a tracker as I was planning to sell previously and move into rental and it had no redemption fees. As it turns out it was a smart move, as interest rates went down !

But next time I'll definitely be going 5 year fix. Interest rates really can't fall much further, so probably worth tying in now just in case in a few years they do start moving up.

Mmm, that's interesting that two of you make lower overpayments with santander. I'll have to look again although they're not coming out as having the best rates when I look now so may not be contenders anyway.

My Halifax mortgage is fixed for 5 years but can pay up to 10% of the overall balance in overpayments each year. There is no minimum. I just log in and pay £100 a couple of times a month.