5 year fixed mortgages...

MikeyC123

Having weighed up everything I am thinking of going for a 5 year fixed.

Considerations in reaching this conclusion were;

1. Interest rate downside v's upside is limited.
2. If interest rates fall further I think the banks will swallow the difference in their differentials.
3. I am currently 75% LTV (just) If I go for any 2 year deal or similar if the housing market continues on it's slippery slope my LTV will be higher when I come to remortgage in 2 years time so maybe forced into a higher lending bracket, >75%LTV & another arrangement fee.
4. Peace of mind for 5 years
5. Rates, the best I can find is c&g 5.09 for 5 years reverting to 4%SVR after. DOes anyone know of a better one out there ? (we will be doing interest only)

I am looking for opinions on my idea thus far and if anyone has experience of c&g mortgages and if they have kept their SVR differential to Base a constant and passed on recent cuts to SVR mortgage holders.

all thoughts and information fully appreciated.

Thanks
MC

Cannon_Fodder

don't know the deals out there, but you asked for an opinion...

"makes sense, good idea."

are decent 10 year deals out there?

hearts

I would jump at 5 year fixes, if they were fixed with some relevance to the present rates. 5.09 does not seem a rate to get me excited though.
With BOE rates likely to reach 1% I'm hoping there will be much better deals next year.

koexelek

The lenders are pushing five year fixed rates at the moment.

Keeps the client locked in for a further five years, giving them a bit more stability

smckay

I feel very lucky to have got a fee free +0.79 BoE base rate tracker.

If a good long fix comes along with a low fee I would jump at the chance.

I see fees holding some people back especially whilst rates are low but it would be interesting to work out at what point jumping to a fix would be financially viable.

If I can get 12 months at below 3% with no fees fixing at 5% for £1000 will not make sense, as rates climb that gap will narrow and fixing will look more attractive.

Personally I will be reviewing proposed rate changes and the fees and rates for long terms fixes regularly and then pounce when I think the time is right!

caracal_77

smckay wrote: »

I feel very lucky to have got a fee free +0.79 BoE base rate tracker.

If a good long fix comes along with a low fee I would jump at the chance.

I see fees holding some people back especially whilst rates are low but it would be interesting to work out at what point jumping to a fix would be financially viable.

If I can get 12 months at below 3% with no fees fixing at 5% for £1000 will not make sense, as rates climb that gap will narrow and fixing will look more attractive.

Personally I will be reviewing proposed rate changes and the fees and rates for long terms fixes regularly and then pounce when I think the time is right!

Agree, although shrinking LTV is a big factor in making this decision. I'm also on a tracker (now BoE -0.31%, moving to BoE +0.99% in May 2009), and will look for the right time to fix.

andyyorks

Hi Mickey,

I'm in the same position as you, my LTV is now 73%. I've an offer from C & G for the five year fix @ 5.09%. I'm just waiting a couple of months to complete the remortgage as C & G will move you on to a lower rate if they bring one out. My other problem has been that I'm currently with Alliance and Leicester who are offering nothing competitive really at the minute. Their SVR is high too.

My feelings are that if I can get a fix below 5% for five years then historically this won't be a bad deal. The problem is, who knows what things could be like in three years? I think I could regret taking a long term fix at these levels, but the security of knowing that the repayments are comfortable is more important in these uncertain times.

All the best with your decision, I hope it's the right one.

Andy

allan673

good points made, i like the security of fixed rates too.

im 6 months into a 10 year fixed rate of 5.15% with first direct. i need the security of knowing what my payments will be as i aim to also overpay - and pay the mortgage off when the fixed rate ends.

uzubairu

allan673 wrote: »

good points made, i like the security of fixed rates too.

im 6 months into a 10 year fixed rate of 5.15% with first direct. i need the security of knowing what my payments will be as i aim to also overpay - and pay the mortgage off when the fixed rate ends.

That's the same reason why we took a 10 year fixed rate. We are 2.5 years into ours, and have already started overpaying.

We hope to have paid it all off by the end of the fixed rate period (2016).