Tools, Tricks & Advice For Comparing 2yr & 5yr Fixed term Mortgage.
strawberries1
Posts: 865 Forumite
Hi everyone,
This is my first time getting a mortgage and I'm looking for tools I can use to compare fixed term mortgages.
How do I decide on whether the 2yr is better for me than the 5yr in terms of cost and potential interest rate rises? I feel the rates will on average stay the same over the next 5yrs. .25% raise here and a .25% cut there. I'm considering the 5yr fix cos I might want to go self emp at some point.
To compare a 2 and 5yr mortgage I multiplied the 2yr one by 2.5 but then the 5yr one has fees. Do I divide and then spread it over the full 5yrs for a true comparison?
I'll like to know how much is the sum by which the 5yr is more expensive so that I can decide whether it is worth it for the certainty.
Sorry if I've not articulated my thoughts/question properly. Please ask and I'll clarify as best I can.
This is my first time getting a mortgage and I'm looking for tools I can use to compare fixed term mortgages.
How do I decide on whether the 2yr is better for me than the 5yr in terms of cost and potential interest rate rises? I feel the rates will on average stay the same over the next 5yrs. .25% raise here and a .25% cut there. I'm considering the 5yr fix cos I might want to go self emp at some point.
To compare a 2 and 5yr mortgage I multiplied the 2yr one by 2.5 but then the 5yr one has fees. Do I divide and then spread it over the full 5yrs for a true comparison?
I'll like to know how much is the sum by which the 5yr is more expensive so that I can decide whether it is worth it for the certainty.
Sorry if I've not articulated my thoughts/question properly. Please ask and I'll clarify as best I can.
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Comments
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Add the fees make the payments the same then and play with the rates and amounts owing over 5 years.
Only one variable(with fees on renewing) to worry about.0 -
strawberries - please give people an opportunity to answer in your own thread and stop resurrecting dead threads to ask questions of people who haven't been around for months/years.
You'll find it a lot easier when the information you want is all in one place, rather than spread across multiple old threads.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Remortgaging after two years with kids, or another change in circumstances might be difficult.
Ensure you pick a lender with a good record on existing customer retention products so you can change to something new without further affordability or status checks.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »Remortgaging after two years with kids, or another change in circumstances might be difficult.
Ensure you pick a lender with a good record on existing customer retention products so you can change to something new without further affordability or status checks.
Thanks but how does one find this out?
I've spoken to a broker but found some direct deals that are better than his so not sure he can comment on their retention deals or speak favourably about them.0 -
getmore4less wrote: »Add the fees make the payments the same then and play with the rates and amounts owing over 5 years.
Only one variable(with fees on renewing) to worry about.
Thanks. So most remortgage deals have a fee?
Is there a spreadsheet or weblink to do this please?
What do you mean by "make the payments the same"?
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Don't need a spreadsheet just use a simple calculator that allows you to set a payment and shows the detailed amortization.
try
http://www.whatsthecost.com/mortgage.aspx
Decide how much you want to pay and make that the payment on all the options you are comparing.0 -
You would need to ask your chosen/shortlisted lender(s) if you plan to go direct.strawberries1 wrote: »Thanks but how does one find this out?
I've spoken to a broker but found some direct deals that are better than his so not sure he can comment on their retention deals or speak favourably about them.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thank yous!0
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Have you tried using the MoneySavingExpert mortgage calculator? It's very useful and may well answer your questionstrawberries1 wrote: »To compare a 2 and 5yr mortgage I multiplied the 2yr one by 2.5 but then the 5yr one has fees. Do I divide and then spread it over the full 5yrs for a true comparison?
I'll like to know how much is the sum by which the 5yr is more expensive so that I can decide whether it is worth it for the certainty.
http://www.moneysavingexpert.com/mortgages/compare-mortgage-rates
poppy100 -
Thank you so much Poppy!
You're a star!0
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