How long to fix?

Regina.filangie

We are FTBs, and have used a broker to obtain a mortgage.
She first told us about a Natwest deal - no arrangement fee, 4.99% and £250 cashback. We went back a week later to apply and she said it was no longer available and instead recommended Northern Rock - 4.95% with £99 booking fee and £250 cashback, or RBS - 5.25%, no arrangement fee and £500 cashback. The next day she said we had been refused the Northern Rock mortgage and the RBS one was no longer available, and finally offered us Natwest - 4.99% £999 arrangement fee and no cashback!! :eek:

For info - house price 82k, deposit 9k so mortgage required 73k over 22 years.

We said we wanted a fixed rate mortgage for peace of mind in terms of monthly cost and she recommended a 2 yr fixed rate. I'm just wondering though - should we be asking for a 4 or 5 year fix instead? Bearing in mind the interest rates are so low and are likely to go up?

SilverSix

If you read the news a few weeks ago it was announced that interest rates will be remaining low for the foreseeable future.

Fixing for this period would be follish in my opinion.

I'd use that savings/difference from a tracker over a fixed and overpay as much as possible. Then when rates start to pick up switch to fixed.

It'll depend on your situation/deposit if you can find a mortgage that will allow you to overpay and switch to fixed with no fees.

Peelerfart

She would recommend a 2 year fix wouldn't she,you'll be back paying a fat fee after two years.

Either go for a tracker as Benny suggested,or if you are risk averse, fix for 5 years.

IMHO

Evilm

Doesn't sound like that's a particularly good broker. Right now 90% fixes are high but its not worth a two year fix right now as there is a good chance rates won't even be that high on the trackers in 2 years time! If you were paying that rate for 5 years on a 90% LTV that wouldn't be quite as bad.

The problem is the high LTV means higher rates.

I would definitely get a second opinion from another broker before going with anything that advisor says.

wackorash84

Regina.filangie wrote: »

We are FTBs, and have used a broker to obtain a mortgage.
She first told us about a Natwest deal - no arrangement fee, 4.99% and £250 cashback. We went back a week later to apply and she said it was no longer available and instead recommended Northern Rock - 4.95% with £99 booking fee and £250 cashback, or RBS - 5.25%, no arrangement fee and £500 cashback. The next day she said we had been refused the Northern Rock mortgage and the RBS one was no longer available, and finally offered us Natwest - 4.99% £999 arrangement fee and no cashback!! :eek:

For info - the mortgage is in my partner's name only, house price 82k, deposit 9k so mortgage required 73k over 22 years.

We said we wanted a fixed rate mortgage for peace of mind in terms of monthly cost and she recommended a 2 yr fixed rate. I'm just wondering though - should we be asking for a 4 or 5 year fix instead? Bearing in mind the interest rates are so low and are likely to go up?

I don't know what your credit rating situation is like but we went alone with YBS as they had some attractive rate. We managed to find 15% deposit but at 10%:-

2 YR Fixed @ 10% 4.29% (Product Fee - £495)
5 YR Mixed Term (2 Yr Tracker @ 3.99% + 3 Yr Fixed @5.39%)