How long should I fix my mortgage for?

rebeccak

My fixed-rate mortgage deal ends at the end of June. Although the SVR is less than what I'm paying at the moment, I've heard warnings that rates go up after a recesion and heard horror stories of rates going over 10% etc. Therefore, I'm looking at some fixed rate mortgages. At the moment I'm leaning towards fixing for 4 years but my bank (Bank of Scotland) also have a couple of 5 year fixed rate deals (although I'd either have to accept a higher interest rate or pay a larger fee). I know it's difficult to predict what will happen in 4 to 5 years time but would it be wisest to get the longer deal? I just don't want to come out of my fixed-rate deal at the worst moment...

TEDDYRUKSPIN

No one can actually answer you this. The question is way...................to open.

No one here should recommend anyone here what to do. This will be a FSA regulation breach of code of conduct.

Rebecca, you should ask yourself how you feel if mortgage payments go up over time? Could you afford it? What if the interest rates don't go up for the foreseeable future but you have fixed at an extremely higher rate? How would you feel?

Do you plan to move in the next few years? Ask these to yourself and usually you will get the answer yourself.

Everyone is different. People have different circumstances.

I remember 6 years ago, when interest rates were at 3.5% and that all my colleagues and friends dipped for the 2 year discount mortgage at -1%. I myself jumped at a 5 years fixed at 4.79%. Which was way higher. But over the period of time I needed to this to know what I was paying eaching month.

All my friends over that period of 6 years picked 3 different mortgage packages and paid 3 different arrangement fees. Their nice mortgage rate jumped from 2.5% to a evil 6.25%. Overall the paid more as well.

So what I really trying to say is that it does'nt matter what you pick. As long as it is suitable to you only!

dimbo61

If you have already decided on a 4/5 year fix with your existing lender why not work out the costs with "whatsthecost" website and then add the fees or higher rate to work out the best deal for you.
You want to find out how much you will owe at the end of the deal! and the total cost over the 4/5 years.
Overpay if allowed as this will have a massive effect on the overall cost of the mortgage !! GOOD LUCK