2, 3 or 5 Year Fixed?

tduarts

I'm about to book a rate for our mortgage and the more I think on what period to go for, the more doubts I have.

Currently about to book with HSBS with these rates:
2 Year Fixed
3.99%

3 Year Fixed
4.58%

5 Year Fixed
5.39%

The 2 year looks a good deal but who knows what the rates are going to be in 2 years time?
Any advice on which period to go for?

tek-monkey

I'd go for the longest possible, but thats cos I'm not a gambling man! If you can afford the APR on the 5 I'd go for it, forget about money you could have saved as its worth the security and lack of stress. Interest rates have to rise, so a fixed rate 'should' be more expensive to get in a few years.

I've gone for a 10 year myself, but like I said I don't gamble.

inked

I'm with tek-monkey on this one, go for as long as poss.
I've also gone for a 10 year as the security outweighs the savings for me too.

Peelerfart

Could I ask the OP how much is being borrowed ?

tduarts

Peelerfart wrote: »

Could I ask the OP how much is being borrowed ?

Yes. Where are borrowing £93,000 LTV 75%

Peelerfart

The difference between the 2 year and the 5 year is £70 per month asssuming 20 year term which I should have asked but forgot.

So..... 70 x 24months = £1,680 better off on the 2 year .

Popular opinion is that in two years things will be a lot worse rate wise than they are now. Do you want to be coming off a fix then for the sake of £1,680?

That having been said is it just opinion .

If it were me 5 year fix and sleep easy .10 years IMHO is too long

tduarts

Actually the difference is £75 a month plus something I didn't mentioned earlier which is the fact there is a booking fee of £599 for the 3 and 5-year.

So it comes out as £75*24+£599= a £2399 saving after the 2 years.

I don't want to be tied for more than 5 years as I might want to sell.
Maybe I could go for another short fixed once that one is over.

Just some thoughts.

Euphoria1z

id also go for the 5 yrs fix. but im going to wait 7-9 months before fixing mines as i still think its a bit early, but thats according to my own circumstances.

puppy8910club

Def the 5 year fixed, seems a good safe bet. Would you want to risk it for a biscuit?

tduarts

Quite an expensive biscuit.

Anyway the opinions are unanimous.
I agree I'll have peace of mind for the 5 year period and not having to go through the whole process again nor taking the risk of getting higher rates and another booking fee.

Thanks for the advice and feedback

steve237

I went for a 7 year fixed at 5.39% a few weeks ago with Abbey.

I'm starting a family and didn't want to have to worry about future rate rises. However, I don't expect my decision to begin to "pay off" until years 6 and 7.

I am hoping my gut instinct comes true; that in 5 years, base rate will be around 5-6% and the typical tracker will be 2.5% above that - meaning I'll be quids in...but only just, as I'll be paying through the nose for the first few years.

Also, going for the 7 year fixed, at least I know that even if house prices only rise by 15% in the next 7 years, I will have 50% equity in my house so will have access to all the best deals.