Fixing for 2 or 5 years?

papermoney

Anyone have a crystal ball and give me an idea of what might happen in the next few years? I'm too-ing and throwing about whether to fix for 2 or 5 years.

Any insight appreciated - thanks

Euphoria1z

Hi, ive looked into my crystal ball.

base rates will remain at 0.5% till the last quarter of 2011.

It will then start moving upwards and settle around 3.5% by end of 2012.

So my advice is to stay on your svr (my crystall ball says your on a svr) for aprx 18 months from now, and then fix for 5 yrs minimum.

papermoney

Thanks at the moment we dont have the option to stay on SVR as we are remortgaging and the company (NR) will only offer a fixed rate. Would love to be on SVR but sadly can't.

sharon1982

I have no idea what is going to happen in the future but I am a FTB and have decided to fix for 5 years. My thinking is that for the next 2 years or so we may end up paying more than if we were on a tracker, however within 5 years I think the interest rates will have gone quite a bit - plus I would like the security of knowing how much I am paying each month rather than worrying about interest rates.

jockosjungle

It depends, what sort of rates are you being offered by your mortgage lender?

I think we'll be going back to normal interest rates within a few years of about 4%, I think in the next two years rates will creep up, so over that time period I doubt you'll gain by being on a fix. Also in two years time you'll be paying another fee and maybe other costs.

If you like certainty go for a five year fix, if you can afford it, you may be laughing in 2014 or you may wish you hadn't

R

dimbo61

So many factors to take into account about your lifestyle!
you are moving house and may be going up the property ladder every 2 years or this is a long term home for the kids ( GOOD SCHOOLS ?)
Does you job mean moving about the country etc?
I like the security of a 5 year fix but thats me!

ray123

papermoney wrote: »

Thanks at the moment we dont have the option to stay on SVR as we are remortgaging and the company (NR) will only offer a fixed rate. Would love to be on SVR but sadly can't.

Surely if you do not re-mortgage you will automatically revert to your current lenders SVR?

papermoney

ray123 wrote: »

Surely if you do not re-mortgage you will automatically revert to your current lenders SVR?

It's a bit more complicated than that. We are remortgaging to take out additional borrowing and to add me to the mortgage as currently it is only my husband on the mortgage. The current lender only deals with this type of application in a branch and we can't get to ours so using a broker who has come up with a 5.29% 2 year fix or 5 year fix at 6.19%

somethingcorporate

What is your LTV?

Those rates don't seem that good...

Wh05apk

Lenders margins are currently ridiculously high, so I would go for a 2 yr deal, then hopefully in 2 years time you should have slightly more equity, lenders will want remortgage business again, and so be reducing margins so fixed rates will be more realistic.

Your comment about not being able to get to a branch doesn't make sense, most lenders will deal direct by phone, failing that to change lender, and potentially pay an extra couple of % could cost you thousands, surely you can get to a branch on a Saturday? failing that take a couple of hours off work?

papermoney

Wh05apk wrote: »

Lenders margins are currently ridiculously high, so I would go for a 2 yr deal, then hopefully in 2 years time you should have slightly more equity, lenders will want remortgage business again, and so be reducing margins so fixed rates will be more realistic.

Your comment about not being able to get to a branch doesn't make sense, most lenders will deal direct by phone, failing that to change lender, and potentially pay an extra couple of % could cost you thousands, surely you can get to a branch on a Saturday? failing that take a couple of hours off work?

My husband phoned the branch today and they insisted that we would have to go into a branch. It really is a nightmare to get to. It is not open on Saturdays (not much is here TBH).
My other worry is that we've already had a search through the mortgage broker so another might not be good.

Our LTV at the moment is 60% but with the extra borrowing and debt consolidation it will go to 85% LTV