First Time Buyer.. 2 or 4 year fixed?

lions_roar

First time buyer here, been offered the following deals

5.79% fixed for 2 years
or
5.74% fixed for 4 years

I know no one has a crystal ball but has anyone got any advice on whether i should gamble with the 2 year deal or go for the security of a 4 year deal but the chance of missing out a low variable rate that i might of got with the 2 year deal when it expires?

beecher

I'd go for the 4year - in my opinion (for what it is worth), variable rates will be higher in 2 years time. If your LTV is high at the moment, you could end up stuck on a sky high SVR. I don't think 2 year deals are worth it, particularly with the high fees usually attached.

lions_roar

Thank you for your opinion, my LTV will be 85% as im putting down a 15% deposit..............im also having to put the mortgage over 30 years rather than 25 years to gain me a £50 month extra in my pocket

beecher

That LTV may well be above 90% in 2 years time, particularly as you'll have paid very little off the capital due to the length of the term so I'd definitely be looking at the 4 year rate. Try to overpay that £50/month extra anytime you can in order to try to keep your LTV down.

lions_roar

Anymore advise anyone, as i need to make a decision today or tomorrow as my offer on a place was accepted last sunday

TheAnalyst

If it helps I'm buying my first flat and was offered 2,3 & 5 years fixed at 5.19, 5.29 & 5.49.

I'm fixing in at 5 years.... more important to me to know exactly what my payments are going to be for the next few uncertain years rather than taking the risk with a shorter term or even a tracker.