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    • strawberries1
    • By strawberries1 20th Mar 17, 11:21 AM
    • 639Posts
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    strawberries1
    Tools, Tricks & Advice For Comparing 2yr & 5yr Fixed term Mortgage.
    • #1
    • 20th Mar 17, 11:21 AM
    Tools, Tricks & Advice For Comparing 2yr & 5yr Fixed term Mortgage. 20th Mar 17 at 11:21 AM
    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.
Page 1
    • getmore4less
    • By getmore4less 20th Mar 17, 2:01 PM
    • 30,006 Posts
    • 17,934 Thanks
    getmore4less
    • #2
    • 20th Mar 17, 2:01 PM
    • #2
    • 20th Mar 17, 2:01 PM
    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.
    • kingstreet
    • By kingstreet 20th Mar 17, 2:25 PM
    • 32,080 Posts
    • 17,170 Thanks
    kingstreet
    • #3
    • 20th Mar 17, 2:25 PM
    • #3
    • 20th Mar 17, 2:25 PM
    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.
    • kingstreet
    • By kingstreet 20th Mar 17, 2:27 PM
    • 32,080 Posts
    • 17,170 Thanks
    kingstreet
    • #4
    • 20th Mar 17, 2:27 PM
    • #4
    • 20th Mar 17, 2:27 PM
    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.
    • strawberries1
    • By strawberries1 20th Mar 17, 3:28 PM
    • 639 Posts
    • 136 Thanks
    strawberries1
    • #5
    • 20th Mar 17, 3:28 PM
    • #5
    • 20th Mar 17, 3:28 PM
    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.
    Originally posted by kingstreet
    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.
    • strawberries1
    • By strawberries1 20th Mar 17, 3:31 PM
    • 639 Posts
    • 136 Thanks
    strawberries1
    • #6
    • 20th Mar 17, 3:31 PM
    • #6
    • 20th Mar 17, 3:31 PM
    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.
    Originally posted by getmore4less
    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"?

    • getmore4less
    • By getmore4less 20th Mar 17, 3:34 PM
    • 30,006 Posts
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    getmore4less
    • #7
    • 20th Mar 17, 3:34 PM
    • #7
    • 20th Mar 17, 3:34 PM
    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.
    • kingstreet
    • By kingstreet 20th Mar 17, 3:45 PM
    • 32,080 Posts
    • 17,170 Thanks
    kingstreet
    • #8
    • 20th Mar 17, 3:45 PM
    • #8
    • 20th Mar 17, 3:45 PM
    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.
    Originally posted by strawberries1
    You would need to ask your chosen/shortlisted lender(s) if you plan to go direct.
    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.
    • strawberries1
    • By strawberries1 20th Mar 17, 3:50 PM
    • 639 Posts
    • 136 Thanks
    strawberries1
    • #9
    • 20th Mar 17, 3:50 PM
    • #9
    • 20th Mar 17, 3:50 PM
    Thank yous!
    • poppy10
    • By poppy10 20th Mar 17, 6:43 PM
    • 5,882 Posts
    • 7,123 Thanks
    poppy10
    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.
    Originally posted by strawberries1
    Have you tried using the MoneySavingExpert mortgage calculator? It's very useful and may well answer your question

    http://www.moneysavingexpert.com/mortgages/compare-mortgage-rates


    This post is sponsored by MoneySupermarket
    • strawberries1
    • By strawberries1 20th Mar 17, 7:28 PM
    • 639 Posts
    • 136 Thanks
    strawberries1
    Thank you so much Poppy!

    You're a star!
    • dimbo61
    • By dimbo61 20th Mar 17, 7:40 PM
    • 9,496 Posts
    • 5,150 Thanks
    dimbo61
    It is not just about the rate or the 2/3/4/5 years you want to fix !
    Do you want OFFSET ? or Fixed rate ? tracker deals for life of mortgage ?
    Interest only deals have died a death so unless you have a BIG deposit and ways of repaying the loan which the BANK is happy with ( Non starter )
    Now I love offset mortgages and some do Family and friends and allow you to even offset cash ISA,s
    If you need security for a few years due to self employment, kids, part time work or reduction in income then a Long term fix might be for you!
    So much to take into account
    • strawberries1
    • By strawberries1 20th Mar 17, 11:14 PM
    • 639 Posts
    • 136 Thanks
    strawberries1
    It is not just about the rate or the 2/3/4/5 years you want to fix !
    Do you want OFFSET ? or Fixed rate ? tracker deals for life of mortgage ?
    Interest only deals have died a death so unless you have a BIG deposit and ways of repaying the loan which the BANK is happy with ( Non starter )
    Now I love offset mortgages and some do Family and friends and allow you to even offset cash ISA,s
    If you need security for a few years due to self employment, kids, part time work or reduction in income then a Long term fix might be for you!
    So much to take into account
    Originally posted by dimbo61
    My LTV is 63%.
    I'm going fixed.
    I didn't consider tracker for life. I figure I would've paid down in 5yrs and if I go with a lender who gives good rates to existing customers I'll be getting a good rate.
    • getmore4less
    • By getmore4less 21st Mar 17, 7:05 AM
    • 30,006 Posts
    • 17,934 Thanks
    getmore4less
    Have you tried using the MoneySavingExpert mortgage calculator? It's very useful and may well answer your question
    Originally posted by poppy10
    MSE calculator can get the wrong answers.
    • strawberries1
    • By strawberries1 21st Mar 17, 9:44 AM
    • 639 Posts
    • 136 Thanks
    strawberries1
    MSE calculator can get the wrong answers.
    Originally posted by getmore4less
    Oh goodness! Which do you recommend GM4L?
    • getmore4less
    • By getmore4less 21st Mar 17, 11:28 AM
    • 30,006 Posts
    • 17,934 Thanks
    getmore4less
    Oh goodness! Which do you recommend GM4L?
    Originally posted by strawberries1
    understand out how mortgages work and do your own comparisons so you know the answers are correct for your circumstances and choices and know when a tool is giving the wrong or misleading results.
    • botchjob
    • By botchjob 21st Mar 17, 1:44 PM
    • 254 Posts
    • 425 Thanks
    botchjob
    5 year fixes are particularly good value right now, and as low as they are ever likely to get. The 63% loan-to-value will prevent you getting the very best rate though. If you could get it down to 60%, Tesco has one at 1.78% (£995 fee...) or HSBC and First Direct do one at 1.94% fee free.
    • strawberries1
    • By strawberries1 22nd Mar 17, 3:28 PM
    • 639 Posts
    • 136 Thanks
    strawberries1
    5 year fixes are particularly good value right now, and as low as they are ever likely to get. The 63% loan-to-value will prevent you getting the very best rate though. If you could get it down to 60%, Tesco has one at 1.78% (£995 fee...) or HSBC and First Direct do one at 1.94% fee free.
    Originally posted by botchjob
    Botchjob, I'll be left with about £5,000 after all my moving costs if I go up to 60% Is the norm to spend almost all savings on the purchase? I'm used to having savings although I know the market isn't for savers at the moment.

    I have no dependants and good credit.

    Thanks; found it here https://www.hsbc.co.uk/1/2/mortgages/mortgage-rates/first-time-buyer
    Last edited by strawberries1; 22-03-2017 at 3:42 PM.
    • getmore4less
    • By getmore4less 22nd Mar 17, 6:38 PM
    • 30,006 Posts
    • 17,934 Thanks
    getmore4less
    A 2 year deal will get you there.

    oh you decided a 5 year deal is better.

    how much are you borrowing? fee deals may be better
    Last edited by getmore4less; 22-03-2017 at 6:41 PM.
    • strawberries1
    • By strawberries1 22nd Mar 17, 10:43 PM
    • 639 Posts
    • 136 Thanks
    strawberries1
    A 2 year deal will get you there.

    oh you decided a 5 year deal is better.

    how much are you borrowing? fee deals may be better
    Originally posted by getmore4less
    What do you mean by 2yr fixed term will get me there?
    I'm undecided about length of fixed term.

    Regarding LTV, I was on 63% but botchjob suggested I try 60% as the rate is again even lower. I now see his point so I'm going for 60% LTV.
    Last edited by strawberries1; 11-04-2017 at 12:03 PM.
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