2 year or 3 year fixed deal??

andrew4643

Hi,

My wife and I are currently re-mortgaging our flat. We have been offered a 2 year fixed deal for £764 per month. The fees for doing this will be in the region of £1200 including solicitors fees, searches, valuation and redemption fees.

I have the option of getting a three year fixed deal for only £30 more per month.

Which is better to go for? Do you think the economy will get worse and therefore stay on the really good deal for three years or take the 2 year deal and hope that we can get a better deal when that one runs out? Also, the three year deal means we have longer to go before having to shell out another lump of money for fees.

Thanks for any help and advise you may have.

dimbo61

Its all about the LTV ( loan to value)
Now if you have at the moment a LTV of say 90% and take the 2 years fix the LTV might be 82% in 2 years but if you fix for the 3 years then the LTV might be 75% or less !!
So come remortgage time you have the pick of the best deals on the market.
use "whatsthecost" to work out how much you will have paid off the mortgage over the 2/3 years.

gizmo111

Whats the interest rate?

andrew4643

Thanks for your replies. The 2 year fixed is at 3.6% and the 3 year fixed is 3.94%.

The product is for 80% LTV which we only just qualify for.

andrew4643

Oh - and its interest only if that makes any difference??