3 or 5 year fix?

matt987106

i was looking a few months ago for a fixed rate, i missed the 3.99 % for 5 years so decided to wait and see what was going to happen

its been 2 months and i have allready saved 250 quid over what i would have paid if i had fixed, 125 a month is not to be sniffed at

cake21

dimbo61 wrote: »

Its not so much about how much you will save its about how much you will owe at the end of 3/5 years and what the rates are then!
If you took the 5 year deal and overpaid by say 10% each year you could be almost mortgage free in 5 years.
fees for mortgages have jumped up alot in the last 1/2 years who is to say you wont have to pay £2/3k in fees in 3 years!

Gorgeous_George wrote: »

:rotfl:

A £100K loan at 4.8% would cost £573 per month. Pay an extra 10% per month and you knock nearly 4 years off a 25 year term. Hardly almost mortgage-free.

Or are you suggesting the OP makes overpayments of £10K (10% of the mortgage) per year?

GG

Perhaps "almost mortgage free" is a bit of a stretch

But my mortgage allows me to overpay by 10% of the balance oustanding at the beginning of the year, each year. So in your example that would be £10k in year 1, c. £9k in year 2, £8k in year 3....ending the 5 year fix with "only" £44k outstanding, saving £47k interest and 12 years in the process. Plus a much healthier LTV for re-mortgage. This is exactly what I'm hoping to do

dimbo61

Hi george and Cake21,
I have a 10 year mortgage which is offset fixed for 5 years and I overpay by 10% each year ( allowed more just cant afford!) will have cleared half my mortgage debt after 4 years so hope to be mortgage free after 7/8 years.