end of fixed term, what to do ?

soweezy

hi all
we're coming to the end of a 2 year fixed rate and the bank (Barclays) has offered us the following deals, that are lower % than our current deal...
outstanding balance £42,500

2 years @ 2.99% no fees £291/month
5 years @ 3.99% no fees £312/month

currently paying £340/month

I'm pretty sure the post fixed rate is 5.89% variable but obviously their will be more offers on the table by then, as there is now.

question is, should we take the 2 or 5 year deal ?
I'm leaning towards the 5 but we may move in that time so hesitant to commit

thanks for any help/advice

harvey115

Both of these look almost the same in totality, however it all depends on how comfortable you are with the moves if they arise in the given time frames again. Here are the scenarios as I see:

-2 Years fix
If you make £20 overpayment, its almost identical to the 5 year fix given that the SVR stays the same post fix.
You would possibly have to look again in two years for a good deal.

- 5 year fix
Again almost identical, but added reassurance of longer time fix.
A bit of a piece of mind for little longer

I would personally go for the 5 Year fix as you never know what might come next and the rest for 5 years before looking around in the market is better as well (less stress).

I would expect the interest rates to possibly go slightly up in two years in non fix deals (just a speculation). I am not a financial advisor!

soweezy

thanks Harvey

kingstreet

That follow-on rate at 5.89% looks too high for now. Was that the SVR when you took out the fix?

IIRC Barclays/Woolwich's current SVR is 3.99%. Check your follow-on rate before you choose a new deal.

Alexei

soweezy wrote: »

hi all
we're coming to the end of a 2 year fixed rate and the bank (Barclays) has offered us the following deals, that are lower % than our current deal

<...>

question is, should we take the 2 or 5 year deal ?
I'm leaning towards the 5 but we may move in that time so hesitant to commit

thanks for any help/advice

Probably neither - it's likely that another lender could give you a better deal. Have you considered talking to a broker, or at least looking around to compare rates? I would never accept what my current lender was offering before checking what else was available.

If you're likely to move, think carefully before choosing a long fix. Even if it's theoretically portable to a new property, there's no guarantee that the lender will agree to any extra kending - or if your circumstances have changed you might not even be allowed to port the mortgage at all.

Alex

soweezy

sorry, the follow on rate is 3.89% above base not 5.89%

porting is allowed and we can make overpayments of 10% per year, not good at the math but it would be a fair chunk over the 5 years