3 year or 5 year fixed rate?

ginandtonic1988

I've decided to go with Brittania BS but can't decide if to go with 3 year fixed or 5 year fixed. I'd be interested to know what you guys gut instinct is regarding the interst rates that seem to be on the up at the moment - Thanks.

TEDDYRUKSPIN

Only you would know. :beer:

sablade

depends on cost difference, redemptions ect. The best mortgage is the lowest, longest fix with no redemptions

sablade

i feel the bank of england will increase rates to curb spending/inflation/house prices and in the next year bank base rate will rise, but no-one knows what the uk or world economy will do in the next 10 yrs. It can be affected by who runs the UK, wars etc etc

Lucy_Lastic

I recently went for a 5 year fixed rate mortgage (from NatWest). I have always gone for 2 year fixed rates before.
I don't know why though! It just seemed like a good idea at the time.

dillydilly

I've been considering the same. No-one knows where interest rates are going over the next five years, though if your mortgage amount is low the current fee free offer may make all the difference. I've been switching on 2 year variable rates for the past 6 years, and it costs £399 a go, so the Britannia deal would save £1000 in fees over the 5 years.

At the offer rate of 5.34% on a mortgage of £70k I make that equivilent to a 2yr variable rate over the same period averaging 5.04%.

Given we're expecting the rate to rise to 5.00% this month key question is if you expect the average rate to be 5.25% over next five years... I'd like to think it won't be, and given I probably also have a £300 release fee on my current mortgage I'll probably stay variable

roswell

considering interest rates have been at the lowest for so long i would personnaly fix for as long as possible (this wil also save you multi arrangement fees) as your bonus term ends

bootman

I have just come to the end of a 3 year fixed. I wish now I had done it for longer! was fixed at 4.09%

Sumostar

Don't forget, the main appeal of a fixed term is the security - knowing you will not be paying any more for the next 5 years can be very reassuring and allow you to plan with an element of stability in your budget. For ME the removal of that variable was worth having, even if it meant I missed out if rates went down. Of course they have gone up, and propably will again, but for me the main appeal is the stability.

vij1366

hi it depends whether u are staying there for the long term or the short for long it also depends on the rate they are charging u and the cost of the application fee .i ve decided to go with the a& l for 5yrs at 4.89 it costs £1000 but u get £700 back so all in all its £300 and after the term finishes
there are no redemptions also at the moment fixed rate with the portman bs
i believe is 4.34 fixed for 2 yrs or is it the newcastle

dillydilly

current two year no-strings fixed seem to be about 5-5.5% at the moment, not sure where 4.34% comes from ?
The suggestion that 'interest rates have been low for so long they must be going up' is as logical as applying the same principle to share prices - ie. illogical. Why would fiancial institutions offer fixed mortgages at 5% if they thought rates would be going up much higher - the're profit motivated not charities...