Which mortgage rate would you go for in my situation?

[glowingpink]

We will be able to switch our mortgage deal in a week or so and there are a couple of options on the table:

• 5 year fix at 1.69%

• 10 year fix at 1.99%

We have a LTV of approx. 50% and our mortgage term will be 26 years.

Our current house is big enough for us as a family and in a good location. I'd like to be in an even better location (closer to work etc) so it's not impossible we might look to move at some point, but not a certainty. In the past we've ported our mortgage with our current lender to avoid an early repayment charge when we moved so hopefully we would be able to do that again if needed.

I'd usually always go for the 5 year as you never really know what the future holds and it gives more flexibility if circumstances change. But the difference in interest rates isn't massive and there's so much talk of crazy inflation and interest rate rises in future that now I'm wondering if the 10 year is the sensible option.

Anyone got a crystal ball and would like to help me choose??

I took out a 10 year fixed mortgage back once upon a time. I did it because I liked the repayment certainty. That's the main reason to go for it, if you do. It is within your means now and will not change for 10 years.

Thanks @justtoshare I suppose I was looking at it from the angle that in 5 years, the mortgage rates might not be great (i.e. much higher than 1.99%) and I'd be annoyed I didnt lock it in when I had the chance.

When you came to the end of your term were the mortgage rates on offer significantly higher/lower?

A 10 year portable mortgage because then you’ll be protected from high interest rates in the future for at least some of your lending if you do move.

I think we had paid slightly over the odds when it ended but we didn't regret it. We are currently in a period of extremely low interest rates. Base rates historic high in the UK is 17%, it has recently been as low as 0.1%. Maybe a 5 year fix is long enough for the peace of mind aspect.

I think it was a 10% fix over 10 years which shows you how rates can and do change.

@justtoshare wow 10%

We’ve just taken out a ten year fix. Our mortgage is for 12yrs however we fully expect to pay it off in 10. We like knowing exactly how much we need to budget for each month.

I’ve just been through this dilemma, well not quite we were deciding between a 2 or 5 year because the best lender for our situation is more expensive so ideally would have shorter fix and remortgage sooner but ‘what if interest rates rise’ and we’re stuck paying unaffordable interest rates on a house that maybe in negative equity if the market crashes.

I’m not sure that interest rates can climb to those figures without massive swathes of people being priced out of home ownership. Then in turn the house prices coming down.

It would be pretty bad for business, well everyone, if that did happen😬.