Mortgage rates.

[Rowgtfc72]

Comng out of a 2.1% five year fixed deal.
Interest rates at the minute are between 3.9% and 4.4% for a 5yr fixed rate deal.
Would you go for another 5yr fixed rate or opt for a 2yr and hope for the best.
Apparently interest rates are on the rise again.

Not based on the market just on my personality.

Id choose 5 years if affordable. 2 years is a blink of an eye and itll seem 5 minutes befire you are back in the system of applying (and possibly paying another product fee) again.

Of course it wont feel great if they fall massively (the opposite of what youve been feeling recently with a 2.1) but then you would hopefully jump onto a low one again for a period if that were to happen.

I hate the way homes are risks. My parents got a lifetime rate council mortgage and it only changed if they moved. At least they knew where they stood.

Just a personal opinion but I think rates could be higher again by the time a 2 year product is due for renewal. I would fix for 5 but it really is thumb in the air stuff...

5 year fixed because I really can’t see it getting better in 2 years, just worse

I fixed at 3.89 for 5 years. Natwest reduced this to 3.81, which I locked in. 3 days later, they increased rates on products. 2 years presents too much uncertainty and I don’t to waste more money on product fees in 2 years. I value certainty. There wasn’t a big difference between 2 and 5 years when I got my quotes.

I would't fix at all. I'd wait a while and see how things pan out

We are the opposite. Coming out of a 5.8% fix, we've opted for a 4.4% tracker and we'll keep an eye on the rates before fixing again.

Do the calculations with and without a product fee. Product fees have been more expensive every time for me.

@Rollercoaster1920 hoping to stay with the same provider so keeping fees low.

@Guidanceplease20 I've always gone 5yr fixed rate as I hate uncertainty. Rates were coming down but a few providers put them back up last week. Mines up the end of April with Lloyd's who haven't put rates up yet but I have a feeling it's just a matter of time.

I'd lead with your circumstances rather than fixating on % rate.

How much do you need certainty, and for what period?
Are you likely to move soon (bringing ERCs into play)?

Anyone's guess whether rates go up or down. I just fixed for 5 as I need the certainty for a bit.

Thanks everyone.
No plans to move, or change job or do anything significant in the near future.
Think I'm going to go five year fixed. If I fix with lloyds now, they'll honour that rate as long as I'm within 3 months of the end of my current deal.
Much prefer to know where I stand money wise each month.

I'm similar to you and value certainty and am quite risk averse in general. However, at this point, I agree with the couple of posters who suggested waiting a bit. I think that rates are likely to come down in the short term (12-18 months approx). I think they will very likely rise again, possibly a great deal more, in the mid-longer term though. I would therefore wait a bit and then fix for as long as possible if rates do fall in the short term. If you prefer certainty, perhaps consider a v long fix.

BofE predicting 3.25% by end of Q4

I'm so risk averse, I took out a 10 year fixed at 4.49%, I want to know exactly what my future outgoing are going to be for as far into the future as I can.

As things are, my mortgage will be paid off in 10 years and 2 months and a few % points weren't making much of a difference.

I heard on the radio that inflation should be back within the 2-3% "sweet-spot" by spring. So whilst BoE base rates might come down once more, they are unlikely to come down a lot further than that.

The days of super-cheap borrowing are behind us, and I don't think the current rates ~4% are too bad.

And if certainty is really important for your budget then I would err on the side of caution, and go for the long fix for peace of mind.

@Tootsiroll I've never looked at 10 yr fixed as they've always looked ridiculously expensive. Might see if lloyds offer one and what the rate is. I've got 12 years left on mine so if it was favourable it would be an idea.

The predictions for interest rates are for another 2 maybe 3 cuts through to this time next year. Timings March / April and then autumn. I think personally they will stabilise at 3% as the bottom and the long term forecast is for them to rise through into 28/29 but not drastically. Nobody has a crystal ball obviously but I’d revert to your standard variable for a few months if you have to do this right now and see where you are in the summer. I’d then be looking at a 5 or 10 year fix. If we can get a 10
at under 4% when we come to remortgage then we will give serious thought to it as it’ll let us just forget interest rates all the way through until our mortgage is nearly all paid off.

Think I would do a tracker for now and fix at a later date but what do I know!! Easy for me to say as mortgage paid off.