fixed rate for 5 years?

Decadent_Fool

Ian_W wrote:

So who rattled your cage?

Sorry Ian W, it wasn't you !

meanmachine_2

I love how someone who joined this month with 27 posts to their name is already trying to bully others.

Lord knows what Decadent Fool will be like when they're up to 500 posts.

The OP asked a question about the direction of interest rates. It's a mug's game trying to predict their direction, for the factors I stipulated.

If you'd been on these boards for longer than a heartbeat pal, you'd know that this question comes up all the time.

Almost as regularly as "how can I get a self cert for 8 times my income"?

MarkyMarkD

The only thing you can guarantee about interest rates is that whichever way you predict them going, you'll be wrong.

I personally believe that whilst in theory there should be no difference in value between discounted and fixed rates, apart from the fact that the lender avoids closure costs and hence is able to offer flexibility more cheaply on discounted products, in the current market there is so much competition on fixed rates (and so little competition on discounted rates) merely because of the relative demand for these that fixed rates currently represent better value.

And within the fixed rate market, the majority of demand is for two year fixed rate products, so once again these are probably the best value.

But there is a massive personal trade-off between value and risk - if you can't afford to pay more than current 2 or 5 year fixed rates, and you know you won't have to move in that period, you should fix for the longer term as otherwise you may be unable to afford to remortgage in 2 years' time if rates rise significantly.

Decadent_Fool

meanmachine wrote:

I love how someone who joined this month with 27 posts to their name is already trying to bully others.

Lord knows what Decadent Fool will be like when they're up to 500 posts.

The OP asked a question about the direction of interest rates. It's a mug's game trying to predict their direction, for the factors I stipulated.

If you'd been on these boards for longer than a heartbeat pal, you'd know that this question comes up all the time.

Almost as regularly as "how can I get a self cert for 8 times my income"?

On the contrary, I wasn't bullying at all, merely trying to show how intimidating and downright useless posts such as yours are, to those of us who haven't been here very long. It makes people afraid to ask questions, as there's so often a 'smart' reply.

You set such a good example, and really encourage others to take part. Not.

Joe_Bloggs

@Brasso if you get a discounted rate from your emplyer then the tax man will have something to say regarding taxable benefits. To them a mortgage is a loan at 5% interest and has been for the the last four years.

@Meanmachine.
Take things easy.There is only one day to go before the premium bond prize draw ! I think.
@All and Decadent Fool.
I can remenber when I could not type for tears of laughter on this forum. They obviously were not at my jokes but other's observation and wit.
J_B.

fossman

I am in the same boat, I'm buying my first house and don't know how long to fix the rate for.

I got abit bored at work today so I created a spreadsheet and compared 3 different fixed rate mortgages (2, 5 and 10 years) and compared the actual cost over the first 11 years of the mortgage incorporating remortgage costs.

Basically if you take out a 2 or 5 year mortgage the repayments are lower as you get a better interest rate but the remortgage costs you'll pay at the end of the fixed periods will about equal the extra amounts you pay on the 10 year mortgage.

Joe_Bloggs

@fossman
Congratulations on your financial simulations. Mine are unbelievable !
Is there a way of automatically generating the number of cells in a column rather than dragging a box down and down and down with a contained formula ?
I am an Excel newbie. I have Excel at work but use open offfice calc as it is free at home.
J_B.

Stephen_Webber

what sort of figures are we talking about in terms of the cost of remortgaging?

Stephen

stanmoresaver

Stephen_Webber wrote:

what sort of figures are we talking about in terms of the cost of remortgaging?

Stephen

Assuming a similar price on the OP

Legal fees- £400 approx
Valuation- £300 approx
lenders Arrangement fee £500 approx
Deads release fee- £225 approx
Possible broker fee.

Some products will give you free legal and valuation services-but these tend to have a higher rate so it's worth checking out if it's worth paying (not adding) the costs up front- especially on a bigger loan.

IMHO- it's certainly worth engaging a broker to work it out for you.

hope this helps

SS

OxJak

I'm in the process of buying a first home, and have gone for a 5 year fixed from Nationwide for the following reasons:
- the rate is only fractionally higher than the 3yr fixed
- with the various fees I reckoned it's better to change 5 times over the lifetime of the mortgage rather than 8
- in 3 years' time we'll (hopefully) have one or two small kids and so I don't really fancy remortgaging while trying to budget for them as well, whereas in 5 years' time we'll have a lot better idea of where we're at.

I guess this last point is the main factor - personal circumstances.