Fixed or Variable ?

vixenlouis

What would be best at the moment - any opinions

Looking in to a new mortgage and unsure which to choose.

5 year fixed at 4.99 looks like a safe bet or risk a variable rate

dimbo61

How can anyone give you an opinion with so little information!
LTV,income, joint mortgage,deposit,kids,fees,
Really you need to sit down with a "whole of market broker " and find out your options and he/she would go through ALL your finances

property.advert

It depends on what you can get now ?

If you can get 2.49% then you would be paying 200% of that on a fix (interest only). If rates moved up in a linear fashion to 7.5% at the end of 5 years then you would break even (fees excepted). If rates fail to reach 7.5% in 5 years, or they rise more slowly or stay at the current rates for more than one month, then you "win" on the variable rate.

If you can buy cheap money now at near 2.5% or slightly above, then I cannot make an argument for fixing at 5%. If rates do move and fixes increase, then you still have to current savings to offset the price of a higher fix.

If you can manipulate Excel, it is easy to plot scenarios.

I would probably look at offset rates as well and I would certainly look at what providers have in their range as switching between rates and plans is easy within a bank but if switching lenders, it takes time, perhaps more fees and all the searches and valuations again etc. If I could find a good variable from a lender who also had a decent range of competitive fixed or other products, then I would feel I had a better than even chance of them offering a good product when things do change.