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  • FIRST POST
    • boogiesherbs
    • By boogiesherbs 9th Dec 16, 10:04 AM
    • 197Posts
    • 15Thanks
    boogiesherbs
    2yr vs 5yr fix?
    • #1
    • 9th Dec 16, 10:04 AM
    2yr vs 5yr fix? 9th Dec 16 at 10:04 AM
    Good morning all ,

    I'm torn between a 2yr fix or a 5yr fix rate mortgage, fees are the same but a £71 per month price difference.
    I'm tempted to roll the dice on rates being similar in 2yrs but is that foolish?
Page 1
    • muhandis
    • By muhandis 9th Dec 16, 10:34 AM
    • 311 Posts
    • 130 Thanks
    muhandis
    • #2
    • 9th Dec 16, 10:34 AM
    • #2
    • 9th Dec 16, 10:34 AM
    The honest answer is that no one can say where interest rates might be 2 years down the line, let alone 5 years down the line.

    In your place I would avoid trying to predict interest rates and consider the following points -

    - Am I likely to have to move for any reason in the next 5 years
    - Do I prefer the certainty of fixed payments for the next five years or am I one of those people who will track interest rates ever so often and curse myself if they go down

    PS: I personally would always go for a shorter fix, but that just reflects my personality and way of looking at it.

    Good morning all ,

    I'm torn between a 2yr fix or a 5yr fix rate mortgage, fees are the same but a £71 per month price difference.
    I'm tempted to roll the dice on rates being similar in 2yrs but is that foolish?
    Originally posted by boogiesherbs
    • boogiesherbs
    • By boogiesherbs 9th Dec 16, 10:37 AM
    • 197 Posts
    • 15 Thanks
    boogiesherbs
    • #3
    • 9th Dec 16, 10:37 AM
    • #3
    • 9th Dec 16, 10:37 AM
    The honest answer is that no one can say where interest rates might be 2 years down the line, let alone 5 years down the line.

    In your place I would avoid trying to predict interest rates and consider the following points -

    - Am I likely to have to move for any reason in the next 5 years
    - Do I prefer the certainty of fixed payments for the next five years or am I one of those people who will track interest rates ever so often and curse myself if they go down

    PS: I personally would always go for a shorter fix, but that just reflects my personality and way of looking at it.
    Originally posted by muhandis

    Hi firstly thanks for you reply,
    The mortgage is to move house and plan to stay there for foreseeable future, the second question is that yes I'm permanently checking rates!
    • Glover1862
    • By Glover1862 9th Dec 16, 11:00 AM
    • 206 Posts
    • 112 Thanks
    Glover1862
    • #4
    • 9th Dec 16, 11:00 AM
    • #4
    • 9th Dec 16, 11:00 AM
    I'm in the same situation, I'm favouring 2 years simply because it fits in with my overpayment plans, only 0.45% premium for a 5 year fix for me so quite close so not made up my mind yet. I have until 31 Jan but still reserved the 2 year in case we get some upward movement.
    • boogiesherbs
    • By boogiesherbs 9th Dec 16, 11:08 AM
    • 197 Posts
    • 15 Thanks
    boogiesherbs
    • #5
    • 9th Dec 16, 11:08 AM
    • #5
    • 9th Dec 16, 11:08 AM
    Yeah it's 0.60% between the two for myself
    • AnotherJoe
    • By AnotherJoe 9th Dec 16, 12:34 PM
    • 6,926 Posts
    • 7,366 Thanks
    AnotherJoe
    • #6
    • 9th Dec 16, 12:34 PM
    • #6
    • 9th Dec 16, 12:34 PM
    There arent many realistic* scenarios where rates rise enough over the next two years that you can't, worst case, get a 3 year fix in 2 years time and overall over 5 years end up paying no more. So i believe 2 years is a one way bet, heads you win, tails you dont lose.

    * rates would have to rise very high very fast, and even when it was contemplated they might rise, the BoE said it would be slowly in small increments. And that was pre Brexit, now high rates would be economic suicide for the UK.
    • boogiesherbs
    • By boogiesherbs 9th Dec 16, 1:08 PM
    • 197 Posts
    • 15 Thanks
    boogiesherbs
    • #7
    • 9th Dec 16, 1:08 PM
    • #7
    • 9th Dec 16, 1:08 PM
    Thanks for responses had my initial mortgage application and asked for both products they are going to do checks etc on the 5yr as it's a higher amount per month , but say I can still edit application to 2yr if I decide before paying fees
    • strawberries1
    • By strawberries1 20th Mar 17, 10:17 AM
    • 596 Posts
    • 133 Thanks
    strawberries1
    • #8
    • 20th Mar 17, 10:17 AM
    • #8
    • 20th Mar 17, 10:17 AM
    Thanks for responses had my initial mortgage application and asked for both products they are going to do checks etc on the 5yr as it's a higher amount per month , but say I can still edit application to 2yr if I decide before paying fees
    Originally posted by boogiesherbs
    What did you decide OP?
    We're in the same boat!
    • AnotherJoe
    • By AnotherJoe 20th Mar 17, 10:27 AM
    • 6,926 Posts
    • 7,366 Thanks
    AnotherJoe
    • #9
    • 20th Mar 17, 10:27 AM
    • #9
    • 20th Mar 17, 10:27 AM
    What did you decide OP?
    We're in the same boat!
    Originally posted by strawberries1
    Post 6 still applies.
    • strawberries1
    • By strawberries1 20th Mar 17, 11:37 AM
    • 596 Posts
    • 133 Thanks
    strawberries1
    Post 6 still applies.
    Originally posted by AnotherJoe
    I agree with you on rates and the economy AnotherJoe.

    What're your thoughts on difficulty in then getting another mortgage in 2yrs if there're changes in personal circumstances? eg if one becomes self emp or has a child ??
    • kingstreet
    • By kingstreet 20th Mar 17, 2:23 PM
    • 31,632 Posts
    • 16,896 Thanks
    kingstreet
    Please discontinue and post in strawberries own thread;-

    http://forums.moneysavingexpert.com/showthread.php?p=72280231#post72280231
    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.
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