Remortgaging advice

Amy56

Hi, this is my very first post and I was hoping to pick your brains!!!

Our current mortgage is due to finish a fixed rate in February, and I am trying to decide what the best type of product we should go on to next. Obviously I know things could change in the meantime, but i just wanted to get an idea of what others thought, incase there are things I haven't considered.

I have always opted for fixed rates in the past, as I do like the security of knowing what my payments are going to be, but I appreciate for the last 3 years I have actually been paying over the odds, due to the bank base rate being so low.:(

I was talking to a friend recently who said that she wouldn't go for a fixed rate at the moment what with the base rate being so good, but I have been looking at my current mortgage providers current rates (Chelsea BS) and I admit to having confused myself!!!

My questions are: Is an offset mortgage any good for me? (We will have a mortgage of £110K against a property value of £200K over a 14 years remaining term, and whilst we will have a little savings of £1k, we will then be in a position to save approx £300 a month as all of our debts besides the mtg will be clear).

If I do decide to go with (for me) the comfort of a fixed rate. I can get either a 2 year rate of 2.69%, 3 year of 3.19% or a 5/6/7 year rate of 3.69%. Which rate would you recommend? In terms of predicting the next few years, I am concerned that if I opt for the 2 year one then it could be ending just as prices shoot up - but I admit I don't really understand all the economy talk, so I have nothing to base this on, just my own head!!!;)

As someone who likes to know where I am, I am swaying towards the 7 year rate - as i would know exactly what I am paying for half of my remaining mortgage term - but is this a bad idea?

Sorry for waffling on - your comments would be gratefully received!!:)

Morgage_Confused

There are good 5 and 7 year fixes at YBS(theres another thread on here about better deals if you switch lenders). So it might be worth switching from Chelsea to YBS(although i believe they are one and the same anyway)

For a very small percentage penalty (0.1%) you can have the above fixes with offsett included.

I would personally go for 5 or 7 years fix as the 2 year is kinda risky in my opinion.

Your other option is the trackers that are around at present with great rates but obviously they are more of a gamble.

Amy56

thank you Mortgage Confused!!:)

I will take a look at those YBS products.

I am glad you feel the same as me about taking out a longer term fixed rate - I thought I was perhaps being over cautious and would be missing out, but I just dont like things to be 'up in the air'.

That is probably why I will never be wealthy - I like the security rather than the risk taking!!;)

Morgage_Confused

theres nothing wrong with being cautious with interest rates. who knows what the rates will be in two years. its easy to speculate that they will still be 0.5% but if your on a tracker and the rates go up to 5% or more your in trouble.

ybs do a 10 year fix at 4.19%....i cant see a 7 year fix though.