My new mortgage interest rates - what would you do

[ponyclub1980]

My current fixed rate on my mortgage is coming to an end on 31st October.

Halifax has offered me the following interest rates -

2 yr fixed @ 3.83%
5 yr fixed @ 3.48%
10 yr fixed @ 3.68%

This is a fair bit more than the 1.9% interest we were paying but to be expected in the current climate I guess.

So what would you go for?

Is it worth switching lenders altogether?

I'm so confused me & dp don't really understand these type of things!

The answer will depend on how long you are planning on staying in this house.

Are you able to pay off the mortgage in 2 / 5 / 10 years? If so I would fix for that length of time and overpay to get it paid off. Remortgaging is a pain in the ass and can be expensive with extra fees.

Consider whether you'd prefer to have a predictable fixed payment over the next 5 years when interest rates are likely to remain high, or certainly, higher than we've been used to for a few years. Or are you happy to go with a two year deal and see if rates drop?
What mortgage arrangement fee are you comfortable with paying, and how often? Usually you pay between £1-2k to remortgage even if you're with the same provider - how often are you happy to pay that fee/add to mortgage?
You could shop around and switch lender but higher rates will be reflected across the board.

It's always worth shopping around and there will be deals out there. Check Money Saving Expert for fixes and switches. I doubt you'll get 1.9% anywhere right now though, so it's pretty much a 'predict the future' question.

Think about your attitude to risk. Whether you want to move or not shouldn't be that big an issue as most fixes will let you transfer to another property, though you won't get to repay.

Worth shopping around.

How long are you likely to stay in the house? How long have you got left on the mortgage?

I'd probably go for the 5 yr, if I wasnt thinking I'd move in that time

I’ve been offered better than that this week with my existing lender for the same renewal rate so I’d contact a broker and see if switching to another provider makes sense.

Get on with it though, another rate rise is coming on the 15 Sept.

Same renewal date!

We recently remortgaged, annoyingly. It's gone from 1.8% to 3.4% with the same provider and no fees but still works out £150 more. I've gambled and gone for a 2 year fix, it was a bitter pill to swallow having increased payments let alone for 5 years.

Give London and Country a try, I used them to find my last mortgage after a recommendation on here and they got me a great deal. I’ll definitely be contacting them again next year when my current deal expires

www.landc.co.uk/?ICID=PPCbrand&gclid=Cj0KCQjw39uYBhCLARIsAD_SzMRDxBD_DPVPfSEkncqK9sv_NDSJ9UOjRl6_g2DFqi3J_lpEl81w1Y0aAsXCEALw_wcB

The other thing to consider is whether the monthly savings made by switching lender are outweighed by transfer costs.
It also depends on how long you have left on the term of the mortgage. We were told by our independent mortgage advisor to keep our mortgage with the same lender as we had less than 5 years left to pay, as my first comment is also relevant.

I would definitely think about life stuff. How long do you plan to stay in the house for? Any income changes likely? Do you have kids or do you plan to have them/have more in X period? Might your circumstances be less favourable to a remortgage in 2 years or 5 years’ time? Might you want to sell?

Basically, I would fix for at least five years if it was a forever home and/or I planned to stay long term. If I planned to move in less time I would want to be sure I could port the mortgage.

Yep, more rises on the way, and when Putin realises that he can`t win in Ukraine all the gas will probably go off, leading to more inflation and more rate rises before the wheels come off the economy, so fix for 10 at a historically super low rate and start getting your debt paid off!

The problem with fixing for 2 years is that they can`t let inflation out of the bag again (if they manage to tame it in that time which is unlikely) so rates may well stay high, or higher than your short fix.

Second this advice. They are whole of market. Plus the guy doing ours was very knowledgeable ( as my husband has a dmp so not a standard advisor) I fixed for 5 years and once I'd made my mind out he said I had made the best choice which reassured me)

A housing expert I follow said to go for a five year fix, interest rates are likely to rise and stay higher than recent years. Obviously shop around still tho.

5 year fix at 3.48%. Interest rates are only going to go upwards. Nobody has a crystal ball though so it's always a risk.

Most lenders don’t charge a transfer cost if remortgaging like for like - as in not changing or adding names or repaying secured loans or h2b loans.

I'd go with the 5 year fixed.

Thanks all for the advice.

We've gone for the 5 year fixed. This is our forever home so definitely won't be moving & we had a look on comparison deals & it was actually the best rate I could find for a 5 year deal!

If planning on staying long term/can port it it, I genuinely would go for the longest term fix.
But I would then follow Martin Lewis advice that you have bought peace of mind, and accept it and not think about it again.