Fixed Rate 5 Year Mortgage - A Terrible Mistake?

teedy23

trixie73 wrote: »

i was offered 5yr fixed at 6.39% a couple of weeks ago, im with halifax. however, iv decided to hang fire for the time being. this isnt that good a deal anyway.

I was offered 5.89 and didnt take it, I wish I had now. Swings and roundabouts I suppose, those who fixed are worrying they didnt get the best deal, those who didnt are worrying how the rates are going to go. My deal no longer exists:eek: its gone up.

themaccas

We fixed for 5 years in May for 5.54% and are very happy to have done so, I'm not really bothered about what happens between now and 2013, the peace of mind is worth much more, in fact we could have fixed for 10 years for 5.6% and wish we had done that now. This was with Halifax.

tyllwyd

Fixing is always going to be a gamble anyway so you can't afford to get too hung up on it. But if you think about it, if you fixed for 2 years, then 2 years later you wanted to fix again for another 2, then again for another 1, you would have to pay another two lots of arrangement fees, legal fees etc - that could easily wipe out any profits from a drop in the APR compared to the 5 year fix.

Ian_Griffiths_Halifax

tyllwyd wrote: »

Fixing is always going to be a gamble anyway so you can't afford to get too hung up on it. But if you think about it, if you fixed for 2 years, then 2 years later you wanted to fix again for another 2, then again for another 1, you would have to pay another two lots of arrangement fees, legal fees etc - that could easily wipe out any profits from a drop in the APR compared to the 5 year fix.

Taking a variable rate is more of a gamble than taking a fixed rate.

adandem

We've recently fixed for 5 years, 5.99% fee free, initially I felt gutted that we'd made a mistake but I am not one of lifes risk takers so would rather know where I stand.

The rate we fixed at has gone up tp 6.39% now and who knows what the future holds. The rates would have to be really low for us to think about jumping deals as we would have to pay ERC.

I don't think you can beat yourself up about it.;)

swanny65

I have fixed or capped for the past 18 years. I remembering having an 12.0% cap in 1991 but rates never went above 12.0%. I did benefit form reducing in interest rates. Unfortunately capped rates gradually disappeared and I have fixed.

Until my current mortgage, 5years at 5.04% in 2006, I am sure I had always lost out overall. However as mentioned earlier, peace of mind........

trixie73

just looked on the halifax website. the fixed rate what they offered me has now dropped, and so has the fee.

uzubairu

beecher wrote: »

I've taken out a 5 year fix, and am glad of it. I wanted security and to know how much I'm going to be paying out - who knows what kind of state the economy is going to be in over the next 5 years and where interest rates will be at the end of it. Best to just forget about your mortgage for 5 years and be thankful you're able to - there's plenty of other stuff in life to lose sleep over.

Good advive.

We took out a 10 year fixed rate in July 2006 for the very same reasons. Our friends and family were trying to talk us out of fixing for that length of time.

The security of knowing exactly what the mortgage payment will be every month is priceless. So long as you are not currently stretching yourself to pay it.

The rate we got from the Nationwide was 4.79%.

We are also able to overpay £500 per month too, because of pay rises since taking out the loan and discipline in daily spending.

Spangled

FWIW, I fixed at 5.55% in July 2007 for three years (Coventry BS). Friends of mine went to BR trackers a few months ago and I thought they were mad but now maybe they're looking like they did the right thing.

That said, my three-year fix is unusual in that it has no ERCs so if the BR continues heading majorly south then I have the ability to switch to a tracker at relatively low cost.

But I'm happy with my fix. I can also make unlimited overpayments (lump sum or monthly), a feature I've been taking advantage of recently.

Frankly, I wish I'd fixed for five years. Even if we wanted to move, I'm pretty sure the housing market will be dead flat for the next few years - we're stuck here (SE London) for the time being!