5yr vs 10yr fix?

clairebeth · 19 April 2017 at 6:42PM

Ahhh, alas! It looked like we might have had everything in place to obtain this rate! All the paperwork, impeccable credit reports...but, in the end, I don't meet their maternity leave criteria. Both the broker and I felt that, seeing as we don't want the switch to happen until August, that me returning to work in October would be fine. Seemingly they had an Atom rep in the L&C office today and they specifically discussed our application and I need to be returning to work within three months of the application submission, not from the day the mortgage commences! Sigh.

Not to worry, back to the drawing board. Still in a fortunate position. It's not like we're living in Syria!

GardenGirl77 · 19 April 2017 at 9:36PM

I'm sure there will be other good deals - there seems to be a bit of a price war at the moment. In the meantime enjoy your mat leave

clairebeth · 20 April 2017 at 8:39AM

Thank you, GardenGirl! I note they pulled the 1.29% overnight but the other mortgages from Atom remain. We might sit on it a bit. We have had an excellent experience with London and Country over the past 48 hours too.

originalmiscellany · 20 April 2017 at 5:48PM

Yes, the star Atom mortgage is removed. Best of luck in securing your mortgage

clairebeth · 23 April 2017 at 7:01PM

Getmore4less, do you use a particular calculation or a spreadsheet for your sums? I can use a spreadsheet to do 'forecast' of payments/balances etc to compare mortgages, but I can't work out how to do what you do, to see 'what do interest rates need to be in x years for this to be a good/bad idea?'

Basically, I'm going back to my original thoughts in my 'ditch our fix' thread about fixing onto a super low rate for two years, as the other five year rates don't really benefit us over the two years we have remaining on our current fixed term, and then we would end those two years worse off with only three years left to go on the fix (does that make sense)?

So again, I'm trying to compare

169200 @ 1.18% over 23 months (potential fix)

164600 @ 3.69% over 23 months (current fix)

If we switch, and in two years time the country is down the toilet due to Brexit (appears less likely than I thought last June, admittedly), then what do rates need to be at for me to think 'bummer should have taken that 10 year fix'.

Our current potential long term fixes being:

168,000 @ 2.19% over 5 years

or

168,000 @ 2.64% over 10 years.

I hope my ramblings make sense! It may be fruitless for a couple of months until the maternity leave is nearer the end. Your help, or a point in the right direction of how to do that calculation, is greatly appreciated!

Thanks!

getmore4less · 23 April 2017 at 7:29PM

i just use multiple tab and
http://www.whatsthecost.com/mortgage.aspx

play with numbers.

add fees make the payments the same and see what's left give a quick and fairly accurate comparison over a period of time.

I do have a spreadsheet on my main computer to do some of the common comparisons and forcasts.

There are only 4 variable and you only need 3 to model a mortgage
typically you have, amount, rate and payment.

if you want to hit a target like an amount left in 5y to match the 5y fix.
At the end of the 2y fix you have the amount owing and the payment and 3 years, if you change the rate you get an amount owing in 3 more years(5y in total) when that matches the same amount as the 5y fix that's the rate needed to break even after 2 years.

You then decide if that is high enough to go 2+3 or go 5.

the iterative process takes a little time but you get good at guessing the rate when you do it a few times.

clairebeth · 23 April 2017 at 7:31PM

Thank you! I really appreciate it! I'll have a muck about with it!

sevenhills · 27 April 2017 at 10:39PM

clairebeth wrote: »

If we switch, and in two years time the country is down the toilet due to Brexit (appears less likely than I thought last June, admittedly), then what do rates need to be at for me to think 'bummer should have taken that 10 year fix'.

I am hoping to get a 10 year fixed mortgage, next month, from the Coventry.
A couple of years before rates nose dived, no one predicted it, and no one can predict when rates will be 5%+
I am a right to buy, £35k, over 12 years.

clairebeth · 28 April 2017 at 3:45PM

That's true, although I was a first time buyer in 2009 and the reduced rates weren't actually passed onto the public for ages, 6.04 :-( ! However, you are completely right, no one can predict the future, but it's reasonable to try and pay less in the meantime to be in a better position in the future!

clairebeth · 28 April 2017 at 4:34PM

Is there a reason you want to go with Coventry instead of fee free First Direct?

5yr vs 10yr fix?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free