Mortgage - fix for 2 years or 5

[Viviennemary]

First time buyer. Should they fix for 2 years or 5. I know it's anybody's guess but it really is quite difficult to decide. Any thoughts? Thanks.

We did 5 this summer, luckily got a reasonable rate secured at start of the year. We just wanted the reassure for that period, and advisor said rates unlikely to go down much

I wouldn’t consider a 5 year fix right now unless the rate started with a 4.

Rates are at the peak or very close to it and 5 years is a long time. They are forecast to stay at this level well into 2024 but to have started to slowly fall by the end of 24.

It’s a complex issue though. What exact rates have been offered and is there an arrangement fee? What are the chances they might want to move before the 5 years are up?

Thanks for replying. It's a difficult one. Probably three is better. Think they've been offered 4.86 for the five years. Be annoying if they fall but even more stressful if they go up and you've only fixed for 2 years. I can't see rates going back to the all time low either.

My DD has just applied for a 5 year that starts with a 4. About 4.5 I think. Hopefully it will be accepted.

With a 2 year she would be watching rates like a hawk as soon as she moves in which I think will be stressful in itself.

Their repayments are affordable and they do need to find a place to call their own now.

Rates are highly unlikely to go back down to the all time low for years & years, if ever. However, they are expected to start falling a little from 2024 and carry on falling for a while. I’ll try to find a source later for what I’m saying. Though no one knows for certain, of course.

I would be happier to fix for 2 or 3 years than 5 right now, if a good rate. But there’s a lot to take into account like arrangement fees and personal attitude to risk.

Exactly, some people really like the security of locking into a rate for longer as they need the security of knowing they can pay it. That’s worth a lot in itself. And 4.5% sounds a good rate.

https://www.unbiased.co.uk/news/mortgages/mortgage-rate-predictions-2024-will-they-go-down#:~:text=Mortgage%20rates%20have%20been%20falling,is%20good%20news%20for%20homeowners.

What next for mortgage rates? | This is Money