5 or 10yr Fixed mortgage for F/T Buyer?

brucep

The G/F and I are first time buyers and have been accepted for a mortgage.

A mortgage adviser from an E/A and from the Halifax have both suggested a 5yr fixed.

They also do a 10yr, this seems a better option but they both recommend the 5yr over the 10yr, Why is this???

They both dont give proper reasons other than your circumstances may change but what are these life changing factors?

Cheers

Bruce

Hippychick

You may want to sell up and move or you may want to remortgage in the future.

TBH we are 1st time buyers and have agreed a 10 year fixed with abbey, our reasons for this are, we don't intend to move.

If we have to move and buy elsewhere then we will port our mortgage across and the penalties will be waived.

We like the security of knowing exactly how much our mortgage is going to cost us for the next 10 years, also in 5 years time we reckon interest rates will be higher than they are currently so don't want to get stung too soon.

unite79

Usually the 5 year is better monthly payment.

10 years is very long time to fix for, circumstances will change, Children, seperation, change job, relocation - for me a first time buyer should not be looking so long term - but its your choice - Shocked the Halifax or EA adviser could not tell you why they recommended a 5 over a 10, that is after all the point of getting advice, to find out WHY!

brucep

Thanks for the replies.

The house we're looking at is 3 bedroom, been togeather over 9 years, no children but plan to hence the 3 bedrooms, both have secure but not overly well paid jobs.

We just cant make our minds up to which would be best???

Thrugelmir

brucep wrote: »

Thanks for the replies.

The house we're looking at is 3 bedroom, been togeather over 9 years, no children but plan to hence the 3 bedrooms, both have secure but not overly well paid jobs.

We just cant make our minds up to which would be best???

Are you likely to move or not in the time period, yes or no?

The penalties would not make a 10 year fix worthwhile.

brucep

Thrugelmir wrote: »

Are you likely to move or not in the time period, yes or no?

The penalties would not make a 10 year fix worthwhile.

No,

Almost certainly not as it will hopefully be a house we will grow into, therefore will not need to move in the future.

Turin_Turambar

What is the size of the arrangement fee?

I'm a ftb and when I enquired about a mortgage, the fa in the ea said the arrangement fee was £995 to fixed for either 3 or 5 years.
I thought it would be better to go for a 5 year fix because of the price of the arrangement fee.

Would I be correct in thinking that?

Thrugelmir

Turin_Turambar wrote: »

What is the size of the arrangement fee?

I'm a ftb and when I enquired about a mortgage, the fa in the ea said the arrangement fee was £995 to fixed for either 3 or 5 years.
I thought it would be better to go for a 5 year fix because of the price of the arrangement fee.

Would I be correct in thinking that?

Yes. On the basis that interest rates are likely to rise within the next 5 years. The longer term fix spreads the arrangement fee over a longer period. Personally I dislike arrangement fees as its distorts the true cost of the product. As more than likely you'll pay further fees at the end of the fixed term.