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    • cook0891
    • By cook0891 7th Dec 17, 9:52 PM
    • 107Posts
    • 36Thanks
    cook0891
    2 year or 5 year fixed
    • #1
    • 7th Dec 17, 9:52 PM
    2 year or 5 year fixed 7th Dec 17 at 9:52 PM
    I know there is no magic ball and totally my decision but just wondering what people think to options I have been offered from my broker.

    2 year fixed @ 2.74% or
    5 year fixed @ 3.69%

    This is best for me as no fees etc

    Thanks in advance!!!
Page 1
    • AnotherJoe
    • By AnotherJoe 7th Dec 17, 10:49 PM
    • 7,672 Posts
    • 8,286 Thanks
    AnotherJoe
    • #2
    • 7th Dec 17, 10:49 PM
    • #2
    • 7th Dec 17, 10:49 PM
    Interest rates would have to rise catastrophically for the 5 year fix to be the better deal. Seems unlikely in the face of impending Brexit where lower rates are a competitive edge helping exports and minimising exports.
    • kaych
    • By kaych 7th Dec 17, 11:01 PM
    • 333 Posts
    • 187 Thanks
    kaych
    • #3
    • 7th Dec 17, 11:01 PM
    • #3
    • 7th Dec 17, 11:01 PM
    Depends on how secure you want to be in the next 2-5 years.

    We had the same dilemma and decided to go for the 2 years in the end but will pay the mortgage at the 5 years interest rate.

    I just don’t believe the rate will increase by more than 1% in two years time. But that’s just what I think. of course anything can happen with Brexit etc.

    Good luck with your decision!
    • phillw
    • By phillw 8th Dec 17, 12:01 AM
    • 1,034 Posts
    • 620 Thanks
    phillw
    • #4
    • 8th Dec 17, 12:01 AM
    • #4
    • 8th Dec 17, 12:01 AM
    I know there is no magic ball and totally my decision but just wondering what people think to options I have been offered from my broker.

    2 year fixed @ 2.74% or
    5 year fixed @ 3.69%
    Originally posted by cook0891
    What is your LTV? Will your LTV be much better in 2 years? Because if you can put money by then you may be able to unlock better rates in 2 years time.

    What do you think the rates will do? The lender thinks it will go up.

    Are you comfortable taking a risk and seeing if it pays off?

    I always fixed for the cheapest and shortest rate when rates were on the way up, tracker on the way down.
    • getmore4less
    • By getmore4less 8th Dec 17, 1:13 AM
    • 30,777 Posts
    • 18,385 Thanks
    getmore4less
    • #5
    • 8th Dec 17, 1:13 AM
    • #5
    • 8th Dec 17, 1:13 AM
    What LTV they look high

    Nationwide on 90% LTV do no fee 2.39% and 2.94% a much narrower gap
    • getmore4less
    • By getmore4less 8th Dec 17, 2:17 AM
    • 30,777 Posts
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    getmore4less
    • #6
    • 8th Dec 17, 2:17 AM
    • #6
    • 8th Dec 17, 2:17 AM

    I always fixed for the cheapest and shortest rate when rates were on the way up, tracker on the way down.
    Originally posted by phillw
    in the last 40years the only upward trend periods lasting at least 2 years have been

    Jan 1978(6.5%)-> July 1980(17%) (that had a 2% dip Feb-June 1979, peaked Nov 1979)

    May 1988(7.375) -> Oct 199014.875%) (that peaked at Oct 89 so trending was less than 2 year)

    June 1996(5.6875%) -> Oct 1998(7.25%) (not a big enough change to spot)

    Picking the bottom of a period of rise is ......
    • cook0891
    • By cook0891 8th Dec 17, 9:37 AM
    • 107 Posts
    • 36 Thanks
    cook0891
    • #7
    • 8th Dec 17, 9:37 AM
    • #7
    • 8th Dec 17, 9:37 AM
    Thanks for the replies.


    LTV would be based around 72%. Borrowing £102,000 property valued at £140,000.


    The broker said could get lower rates but would incur admin fees etc which wouldn't make it viable.


    My initial plan was to overpay by least £100 per month.


    I am currently paying £545 mortgage 3.89% (think) but have £20000 CC debts which all on 0% but paying around £600 a month on those. Adding these to mortgage (I know be paying interest now on these) but on 2 year plan would be £550 per month.
    • getmore4less
    • By getmore4less 8th Dec 17, 9:51 AM
    • 30,777 Posts
    • 18,385 Thanks
    getmore4less
    • #8
    • 8th Dec 17, 9:51 AM
    • #8
    • 8th Dec 17, 9:51 AM
    75% LTV there are far better deals even with fees than

    2 year fixed @ 2.74% or
    5 year fixed @ 3.69%

    which lender?
    is there affordability issues.


    who is your current lender have you asked them for retention on your current mortgage?

    Is the £102k with the debt rolled in?
    • cook0891
    • By cook0891 8th Dec 17, 10:26 AM
    • 107 Posts
    • 36 Thanks
    cook0891
    • #9
    • 8th Dec 17, 10:26 AM
    • #9
    • 8th Dec 17, 10:26 AM
    75% LTV there are far better deals even with fees than

    2 year fixed @ 2.74% or
    5 year fixed @ 3.69%

    which lender?
    is there affordability issues.


    who is your current lender have you asked them for retention on your current mortgage?

    Is the £102k with the debt rolled in?
    Originally posted by getmore4less

    Halifax is proposed new lender.


    I do think affordability is an issue as asked first direct before and they said no.


    I have asked current provider and they can do £102k over 21 years to pass affordability test, waiting a call back next week to discuss rates.


    And yes, the £102k is debt. £80k mortgage and £22k CC (approx. figures)
    • lovehols
    • By lovehols 8th Dec 17, 10:29 AM
    • 58 Posts
    • 16 Thanks
    lovehols
    We went for a 5yr fix, wanted stability. 2.49 (90% loan to value) with Barclays. We have my current property to sell in the new year and will use a chunk of the proceeds of this for major renovation work and we can still make the overpayments each year too. I'm hoping by the end of the 5 years we can then reduce term significantly, and reassess things.

    I guess it all depends on what you want.
    • Lokolo
    • By Lokolo 8th Dec 17, 11:04 AM
    • 19,849 Posts
    • 14,933 Thanks
    Lokolo
    What is your income?

    £20k on credit cards, even at 0%, is an absolute ridiculous idea. If you are being told you are at your limits of borrowing you must be under £30k?
    • getmore4less
    • By getmore4less 8th Dec 17, 11:18 AM
    • 30,777 Posts
    • 18,385 Thanks
    getmore4less
    Halifax is proposed new lender.

    halifax don't have good rates on this size of mortgage


    I do think affordability is an issue as asked first direct before and they said no.

    really you said earlier you were paying over £1k total pm
    I am currently paying £545 mortgage 3.89% (think) but have £20000 CC debts which all on 0% but paying around £600 a month on those.
    I have asked current provider and they can do £102k over 21 years to pass affordability test, waiting a call back next week to discuss rates.

    which lender?

    And yes, the £102k is debt. £80k mortgage and £22k CC (approx. figures)
    Originally posted by cook0891

    What's your current term on the £80k,
    £80k 3.89% paying £545 is 200 months <17 years.

    What rate will the current lender give on that with <60%LTV

    is the £1,145pm sustainable.

    when do your 0% run out (a list if more than 1)
    Last edited by getmore4less; 08-12-2017 at 11:25 AM.
    • cook0891
    • By cook0891 8th Dec 17, 12:22 PM
    • 107 Posts
    • 36 Thanks
    cook0891
    What's your current term on the £80k,
    £80k 3.89% paying £545 is 200 months <17 years.

    What rate will the current lender give on that with <60%LTV

    is the £1,145pm sustainable.

    when do your 0% run out (a list if more than 1)
    Originally posted by getmore4less


    Currently have 16 years and 3 months left with Bank of Ireland.


    I currently pay £545 a month on my mortgage and then around £600 a month to credit cards. I then find myself tight at the end of the month and sometimes put more on the CC which is dangerous.


    My wife only works part time so joint income is around £33k.


    My thought is pay back £550 a month on new rates and clear debt and cut up CC's. I will have to extend my term which I know isn't ideal but for me at this time I just feel best for me and my situation.


    I do appreciate the feedback though.
    • badmemory
    • By badmemory 8th Dec 17, 12:34 PM
    • 1,051 Posts
    • 1,113 Thanks
    badmemory
    Is the mortgage provider seeing a mortgage of £102k plus £20k of cc debt? They will see it as having no guarantee that the extra mortgage will pay off the debt so you are actually looking at in their eyes a total debt of £122k against a property value of £140k.

    If you do actually pay off the credit card debt then you should be able to overpay the mortgage by some of the cc current repayments which will reduce the cost (and maybe the length) of your next fix.
    Last edited by badmemory; 08-12-2017 at 12:39 PM.
    • cook0891
    • By cook0891 8th Dec 17, 12:38 PM
    • 107 Posts
    • 36 Thanks
    cook0891
    Is the mortgage provider seeing a mortgage of £102k plus £20k of cc debt? They will see it as having no guarantee that the extra mortgage will pay off the debt so you are actually looking at in their eyes a total debt of £122k against a property value of £140k.
    Originally posted by badmemory


    No, just £102k, so in theory I could spend other £20k on rubbish but trust me that is not going to happen. Got myself in a mess and learnt mistake.
    • getmore4less
    • By getmore4less 8th Dec 17, 12:47 PM
    • 30,777 Posts
    • 18,385 Thanks
    getmore4less
    looking at the web site

    BOI rates
    <60% LTV 2.09% product switch no fee
    <75% LTV 2.29% further borrowing no fee.

    Using those rates 0.2% on £80k is £160py and 2.29% on £22k is £500py consolodating will costs an extra £55pm to start with)

    Consolidation has issues of its own if you can't control the spending

    there is a mid ground where you consolidate some clear the rest before the 0% runs out and overpay to bring the term back down.

    For now I think you need to focus on getting better rates than your broker is finding.
    Last edited by getmore4less; 08-12-2017 at 12:52 PM.
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