5 or 7 year fix for FTB

manny1481

I am looking at a mortgage of £123,000 with a 10% deposit for my first property. - because of this, the rates are high (around 4.9%)
Any advice would be great - Do you think a 5 year fix is fine or would you prefer to pay an extra £30 per month to get a 7 year fix.

Interest rates i think will rise very steadily for the next few years

Meeper

Personally, I would stick with 5.

GAH

4.9% may seem high to you, but with a 10% deposit that is actually a pretty good deal. This is the lowest rates have ever been and probably will be.

It depends how long you are planning to stay, 5 years is a lot longer than you think, and if you sign for longer you will have to work out the costs of the ERC if you want to move.

Id go with 5 years

manny1481

Thanks for the advice.
I am not planning on moving at all really - hope to raise a family there and stay for a long time.
Is 5yr fix suitable and much better than a 3yr fix then even though my home will have gone up in value due to the work I plan to do on it - the LTV will be much lower than 90% as it is now.
I would save £50 per month on a 3yr fix with rates of just 3.99%

ACG

After 5 years, hopefully your LTV will be lower and you will be able to secure a lower rate. Obviously that depends on where interest rates are in 5 or 7 years time.

Its difficult to say but i suspect you will stand a better chance of getting a lower rate in 5 years than in 7, i have nothig to base this on other than my own opinion, i just think the economy will be back on track in 7 years so interest rates will be higher.

Wh05apk

I would probably look at going short term if possible, 90% deals are high, if you are inproving your property, hopefully in 2 years time your LTV will be low enough to get a decent rate.

andy.m_2

Shows a sign of the times when under 5% is considered a high rate!

thomasdown

manny1481 wrote: »

I am looking at a mortgage of £123,000 with a 10% deposit for my first property. - because of this, the rates are high (around 4.9%)
Any advice would be great - Do you think a 5 year fix is fine or would you prefer to pay an extra £30 per month to get a 7 year fix.

Interest rates i think will rise very steadily for the next few years

Personally I would say 5 aswell. If you have no adverse credit issues and have a squeaky clean credit history you can't beat HSBC's 5 year fix at the moment. I got this rate about 4 months ago and I was a 1st time buyer and I couldn't fault them, the whole process was very easy.