5yr fix or 10yr fix?

[User112]

We are buying our long term home. Very likely to be our forever home. 5yr fix is 1.54% and 10yr fix is 1.71%

With such a small difference, would you just go for the 10yr fix?

I would fix for 10 at that personally.

Yes fix for as long as you can. Interest rates are amazingly low. Security for 10 years.

If you can afford to absorb the ERC if you need too, then 100% go with the 10 year fixed. At that rate, you must have a low LTV.

@rhowton What’s ERC?
Our LTV is just under 70%

ERC = early repayment charge. You'd only have to pay that if you pay the mortgage off within the ten years.

10 years definitely at that rate, looking at the way inflation is going and with interest rates likely to follow. I would expect a period of longer economic instability to be coming as well.

Check you can port the mortgage as it may feel like your forever home but you never know what may happen that far in the future.

I would go for the 10 years but make sure I could port.

I would run as fast as you can and lock in that 10 year deal

10

10, as long as you can move the mortgage to another home if that is the way life goes.
Now, you think you will stay there, but 5,6,7 years down the line you don't know what will be happening in your life.

Interest rates are only going to continue to rise so I would fix at 10 years.

We have just fixed at 10 years but we checked we could port the mortgage if we needed to and we are overpaying it a little each month (in line with the lender's terms).

Put it another way; if you were renting and the landlord offered to fix your rent for 5 or 10 years with no rises,what would you do?

10 but check you can port

Think about possible house moves though, you'll be stung with an early repayment charge if you move. Our current charge is 5% of the mortgage balance.

Early repayment charge is 6% on the 10yr fix and 5% on the 5yr one.

I’ll ring them tomorrow to check if I can port.

Does your early repayment charge decrease with how much time is left on the mortgage though? On our 5 year fixed our repayment charge is much higher in year 1 than in year 5.

Also consider when porting you need to be in a chain, i.e. you can't sell, go into rent and then find a new property. This might be a consideration in a tight housing market.

I would 100% fix at 10 years, under 2% is incredible.

We started a 5 year fix in December - we aren’t sure if this is our “forever home” but in many ways I wish we had been able to do a 10. It’s a 4 years from
now problem but I’m anxious about what the monthly repayments will be in 2026 if interest rates rise and don’t come down again. I’m just focussing on overpaying as much as I can (which isn’t a lot because the house needs a lot of work!).

Which lender is that with?

In your position I'd go 10 Yr fixed too.

We're remortgaging at the moment, and have found 1.34% for 5 Yr fixed, but the same lenders 10 year rates are higher than what you've found.