10 year fixed??

Lettyx1

I'm currently on SVR 4.24% with Britannia and have 12 years left on my mortgage (£75,500). I'm considering going for a 10 year fixed as a) I won't have to bother again and b) I like the security of a fixed rate. I'm thinking now is a good time to go for it before rates start increasing again but have cold feet about making such a long commitment. So far I'm considering Britannia at 5.29% with a £599 arrangement fee (or 5.49% with £0 fee) and the Co-Op at 5.29% with a £999 fee (or 5.49% with £0 fee). (I'm not sure if the Britannia mortgage is portable).

What is the general feeling about going down this route/these products in particular? As you can probably tell I don't like taking risks with my money - does anyone have any better ideas??

Many thanks,

VIGILANT22

Quote: does anyone have any better ideas??

yeah........a 5yr..........

ray123

There is a lot to take into consideration, such as how much you are currently paying, and how much you would subsequently be required to pay on a 5 or 10 year fixed.

I would suggest taking out the ten year fixed, the rate of 5.29 is excellent. Is the cost of borrowing is to increase then the rates next year or in 5 years time, might not be so generous.

The arrangement fee is 999 for both britannia and co-op?

smcqis

IS it transferable with you to another home, if not you need to think about this incase you want to move

sundin13

I'm looking at the same deals as yourself - Co-op and Brittania now being the same company.

I was told by the adviser I spoke to on the phone that I would be able to move the mortgage, and move the rate with it.

I currently have £92k mortgage on a £135k house. This entitles me to the rate for having a 25% deposit (4.74%). If I move to a £180k house and need to borrow another 50k, I will only get the rate appropriate to a 15% deposit on that part of the loan.

If I'm not mistaken, this seems like a pretty good deal to me - if I repaid my current loan and took out a new one on my new property it would all be at the higher rate - so I'm going to be saving quite a whack!

S13

[Deleted User]

Other things to consider:-
Are you taking out the mortgage with a partner? What would happen if you split up and had to sell the house? What would the early redemption penalties be? What about if you lost your job and had to sell the house? Does the mortgage allow overpayments and if so how much?
I can understand the attraction of going for a long term fixed rate at the moment but i've always been put off by their lack of flexibility if your circumstances change and high early repayment charges.
A 10 year fix may start to feel like a financial straitjacket at some point and if it were me, I would feel more comfortable with a 5 year rate at this point in time.

dimbo61

Use "whatsthecost" to work out which of the 2 deals would save you money and also consider reducing the term to 10 years and you would be Mortgage Free at the end of the deal.
Only consider a 10 year deal if you have no plans to move and the property is big enough for your needs

Pincher

What is the early redemption penalty?

The ERC should be on a reducing scale, so if you are redeeming in year six onwards, it may not be too bad. If you fix for five years twice, once in 2010, and then again in 2015, you will have to pay re-mortgage costs in 2015, at an unknown interest rate.

If you redeem in year 7 or 8, it might be not so bad, because the ERC is offset by the remortgage cost you saved. I suspect you breakeven by year 9. You are definitely a winner if you stay for 10 years.

5.25% is about the long term average, so you are not taking a risk.
If you like security, this is fair value.

I like a bargain, so I am waiting for ten year fix to go below 5.00%.
I want a ten year fix 4.79%~4.99%.

getmore4less

I would look carefully at the overpayment options.

10y is a long time and you could have more surpluss income for a lot of those years.

HarrowArrow

A lot can happen in ten years that might force you to redeem/sell...don't wanna seem nasty by listing the possibilities, but it's a helluva commitment.