What are mortgage brokers currently advising?

[Buttons0522]

Our fix comes to an end soon and we need to choose a new product. What are those in the know currently advising in terms of how long to fix for? From the rates we’ve been offered we’re leaning towards 5 year fix at 4.14%

We've just done 5 years at 4.14% for our new mortgage on a new house. The mortgage broker said 2 or 5 years but 5 fits with our lifestyle at the moment as both kids will be out of education by then so it means while they are still in education we have certainly over our mortgage payment.

Most people think mortgage rates are trending downwards so I would fix for 2 years personally as long as you can find a mortgage where the fees aren't too high.

Though it depends a bit on personal situation as some people prefer the reassurance of knowing they can definitely afford repayments for a longer fixed period.

For the opposite reason to you, I've been keeping an eye out for savings interest rates (so obviously I want the higher rates deals) and the longer term fixed rate savings accounts are not as high a rate as the yearly ones. It was the opposite a few years ago when interest rates were at their lowest (I'm still sore that I locked in a large portion of my savings for 5 years at a rate of 1.2% a few years ago right before interest rates started increasing, and still have over a year to go 🙄) so I can only assume that the Bank of England rate is expected to head down. For that reason, were I still a mortgage holder I would probably be not looking to fix for as long as 5 years.

What is the reason for wanting to fix for 5 years?

Dc just getting first mortgage was advised 2 years originally but when he explained career route over next few years they advised 5 years. So they appear to be expecting reduction, but also you need to look at personal circumstances.

I’m not sure really why 5… probably for security… current rate is 1.72 so feeling grateful we’ve dodged the 6/7 percents as that would have been incredibly painful for us.

We're doing 5 years at 3.83% as we want the security. I expect rates will drop further but we're happy with the risk.

It also depends on your LTV, if that is likely to drop into the next bracket in the next 2 years then a 2 year may be best, if not and you value security then a 5 year will be better.

My fixed rate is due to end next year, just as I hit 40/60 LTV and so I get to get the best available rates. I will go for 5 years as I value the security of knowing what I'll be paying over the next 5 years over the risk of a 2 year.

I may end up paying more but I'll know what I'm paying and won't be stressing. I tend to over pay anyway so, knowing what I have to pay helps.

Great point, thank you. We’re considering an overpayment to take us under the next bracket as we are currently just over 1% over the threshold. But if we don’t, a shorter term would make sense

That is a very good rate to be fair

I've gone for a 5 year fix at 3.84%, though I could change my mind between now and January. My understanding is that the ultra-low rates that start with a 1 will be a thing of the past once the old ones all come to an end, even if rates do go down a but more. This may be wrong, but I will be putting the dc through university over the next 6 years and I prefer the certainty and lack of worry over maybe, but not necessarily, being able to save £100 a month in two years' time.

I agree with @pinotnow that the ultra low rates beginning with a 1 (or even a 2) won’t make a reappearance for the foreseeable future. Though I still think they will keep reducing for a while but in small increments.