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Original poster

Remortgaging: 2yr vs 5 yr?

37 replies

aamaa · 31/05/2022 08:41

Hi everyone, I would appreciate some input on mortgage rates. My brother-in-law needs to remortgage with his existing bank (Metro bank). No chance to mortgage with other banks because he is currently off work- only wife works at the moment. He has been offered remortgage rates of 3.19% for 5 years vs 3.29% for 2 years. He's undecided about which one to go for. 3.19 % is still very high but with these uncertain times should he go for 5 years? Do you think mortgage rates could go higher in the next couple of years? Any suggestion? Many thanks!

OP posts:
Original poster
aamaa · 31/05/2022 23:20

Jealousofchiliheeler · 31/05/2022 18:29

Our mortgage broker was definitely in favour of us going for 5yr fix rate rather than 2yr. He even suggested a 7 or 10yr but that didn't suit our circumstances. But I suspect he has a pretty good grasp of the situation.
Only other option though is if he might be back in work again soon, in which case they could go onto rolling rate for a very short time and then look around for something more competitive, but if not then get 5yr locked it now!

I agree, 5 year seem to be a better option. BIL too leaning towards it.

OP posts:
MrsMoastyToasty · 31/05/2022 23:23

@aamaa . I worked for a high street bank at the time too.

PermanentlyTired03 · 31/05/2022 23:24

If he isn't planning on moving go with 5. We got a 2yr in august last year because we were wanting to move. Cost of living and rocketing house prices has put a hold on that for now- wish we had a 5yr as the rates were great. I'm sure we'll get a shock next year when we have to remortgage 😫

carefullycourageous · 31/05/2022 23:26

Two years is nothing really, I would fix for five.

I am regretting not fixing for ten!

Original poster
aamaa · 31/05/2022 23:27

PermanentlyTired03 · 31/05/2022 23:24

If he isn't planning on moving go with 5. We got a 2yr in august last year because we were wanting to move. Cost of living and rocketing house prices has put a hold on that for now- wish we had a 5yr as the rates were great. I'm sure we'll get a shock next year when we have to remortgage 😫

Yes. My BIL will probably fix for 5 years. Your situation is same as mine. My own house was remortgaged last year for 2 yr fixed. Wish we had gone for 5. If only I knew then what I know now...sigh!

OP posts:
Original poster
aamaa · 31/05/2022 23:30

carefullycourageous · 31/05/2022 23:26

Two years is nothing really, I would fix for five.

I am regretting not fixing for ten!

yeah, a five year fix sounds like a good idea. thanks for your honest reply.

OP posts:
TheLadyDIdGood · 01/06/2022 04:59

We've gone with a five year fixed with Nationwide because as others pps have said the rates will only increase. The 5 Yr deal works out cheaper as you're not paying for another remortgage fee so soon. With a 2yr fixed deal, the term runs out quickly and then you're trying to secure another deal.

Twiglets1 · 01/06/2022 06:23

The rate seems very high and his situation could be completely different in 2 years and then he will be able to shop around for a better deal.

I would stick with the 2 year deal in his situation.

BooksAndChooks · 01/06/2022 06:36

I've fixed for 10 years. It was a good deal at under 2%. I know the rates could rise and then fall again over the 10 yr period, but the lowest ours has ever been is 1.5%. I figure there's more room for them to ho higher than to go lower. We couldn't afford our mortgage if it was 7% or higher, so the security is priceless for us.

If he can afford to pay that rate for the next 5 years, I would go with it.

BooksAndChooks · 01/06/2022 06:37

Although, as others have asked, is his working situation likely to change?

3monkeybars · 01/06/2022 09:15

We've just made the same decision and with the rates as they are decided to go for 5 (we nearly went for 7!). I'd be worried at having to fix a much higher rate in 2 years, it'll come around quickly as PPs have said.

FurierTransform · 01/06/2022 20:14

Personally I'd base the length of fix on your personal circumstances rather than trying to second guess where you think the rates will be (because noone knows...)
In my case, I fixed for 5 years, the theory being it gives me fixed costs/stability completely through the 'nursery fees' stage of parenting.

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