5yr fixed rate

Lira

Can I get out of this before the end of the five years? I seem to be locked in to a very high mortgage. I have two years to go. It seemed like a good idea at the time but I seem to be paying much more than everyone else.

_Andy_

Yes but you'll need to pay early repayment charges which may negate any medium/long term saving.

Thrugelmir

What's your current rate?

eschaton

Lira wrote: »

Can I get out of this before the end of the five years? I seem to be locked in to a very high mortgage. I have two years to go. It seemed like a good idea at the time but I seem to be paying much more than everyone else.

Were you happy with the rate when you took it out?

Would you still be wanting to get out of it if the base rate had gone up to 10%?

Did you not want the security of a fixed rate?

Lira

Yes, I know that there will be a charge for this. I'm really wondering if I can indeed get a better deal if I come out of the fixed rate term or if I should stick it out. I'm a bit clueless. :embarasse

Thanks for your reply. I guess it depends on my income, years left til retirement, mortgage outstanding, interest rate, etc.

I wondered also if anyone else had been stuck in a fixed rate that was good at the time and then regretted it? I suppose that's the way the cookie crumbles sometimes.

Thrugelmir

Lira wrote: »

I wondered also if anyone else had been stuck in a fixed rate that was good at the time and then regretted it? I suppose that's the way the cookie crumbles sometimes.

Why did you take out a fixed rate mortgage?

Lira

eschaton wrote: »

Were you happy with the rate when you took it out?

Would you still be wanting to get out of it if the base rate had gone up to 10%?

Did you not want the security of a fixed rate?

Sorry, posted before I'd read the other posts!

Yes, no and yes to your questions eschaton. My problem is I'm really struggling money-wise and do regret the 5yr tie-in but as you say, I would be quite happy if it had gone the other way. I guess I have no option other than to stick it out.

When I'm at the end of the 5yr term is it worth going for another 5yr term or are there better options?

Thanks for all replies.

Thrugelmir

Lira wrote: »

When I'm at the end of the 5yr term is it worth going for another 5yr term or are there better options?

Do you want security of known monthly repayments, or pay less with the risk that rates may rise.

When I say pay less, I would always add the caveat of overpay your mortgage by what ever you can afford. As the saving is only the interest. The capital balance has to be repaid one day which ever route is taken in the short term.

Lira

Thrugelmir wrote: »

Why did you take out a fixed rate mortgage?

Hi. My current rate is 5.54% and I'm not sure why I took out the 5yr fixed rate. I took the advice of an IFA and she recommended that I did. Like I say, I'm clueless with things like this so that's why I took the advice. I was quite happy at the time and I guess it could have gone the other way. I think mortgage rates were expected to rise at the time maybe?

_Andy_

5.54 is a good rate and will give you medium term stability.

Thrugelmir

Lira wrote: »

Hi. My current rate is 5.54% and I'm not sure why I took out the 5yr fixed rate. I took the advice of an IFA and she recommended that I did. Like I say, I'm clueless with things like this so that's why I took the advice. I was quite happy at the time and I guess it could have gone the other way. I think mortgage rates were expected to rise at the time maybe?

There's no right or wrong decision.

If the budget is tight then a fixed rate mortgage is perfect. You say your budget is now tight. So how would you cope if rates had risen to 7%. Very easy to question decisions with hindsight.