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Any thoughts on how long to fix mortgage?

Hi all,

Purchasing a new house and require a new mortgage to go with it. Does anybody have any thoughts on how long to fix for as we're supposedly coming out of recession??

Following consultation with my financial planner, options seem to be 3, 4 or 5 years

3 year 4.78%
4 year 5.09%
5 year 5.69%

I'm tempted to go 4 years based on these figures as the jump up to 5 years seems a little high. The 3 year deal would save me £40 pm though, any thoughts appreciated!

Comments

  • It's a personal decision, one which you have to look at the risk/reward profie.

    If you think rates are going to be higher than 5.69% in 5 years time, then it might be sensible to go for that rate. However, that means paying a bit more between now and then to hedge that bet.
    Titch :)
  • Thanks,
    it is a personal decision you're right, just wondered if there's any advice being offered to fix for as long as possible at todays rates or something??

    does anybody else have any views on this?
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    What are your long term plans!
    Is this your forever home ?
    Do you plan on starting a family ? Good local primary/secondary schools?
    Do you want to overpay mortgage and do you have a steady income with safe jobs ?
    so many questions to answer
    I am in the middle of a 5 year fix, wanted security with a big mortgage for first few years.
    How much will you owe on mortgage after 3/4/5 years and how much extra does 4.78/5.09/5.69% cost each month.
  • And maybe, just maybe, after you've answered Mr Dimbo's' questions.

    The question is not just, how long to fix for, also it could be asked,
    should we fix at all ?

    Lot's of people are very glad they didn't
    Space available for rent
  • Don't forget that taking a longer fixed period means you can be certain on the amount going out, sometimes you just need to know exactly where you stand for a certain period.
  • jemw
    jemw Posts: 280 Forumite
    It's quite a difficult question to answer.

    I suppose the real question is "How important is knowing your monthly payments fo rthe next X years"?

    If you are not worried how much you will be paying for your mortgage after the next three years, go for the cheaper 3 year fixed deal.

    If you would like to know how much you will be paying for your mortgage for the next 5 years, go for the more expensive 5 year fixed deal.

    If you don't care how much you will be paying, don't fix at all.

    We fixed for 10 years at 5.95% almost two years ago immediately before the market came crashing down around us. Yes, it's a little frustrating that the interest rates have reduced dramatically since then. However, it could easily have gone the other way and as FTB, we decided it was more important for us to know the exact mortgage payment for as long as possible, rather than saving money.

    HTH
    Jen
  • TRACKER likely to be the cheapest option by a considerable way and fix in 18 months time, but have you the nerve or can you take the risk.....
    Totally without prejudice! All views are those of the individual and at no time should be constituted as advice.
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