Fix for 3 or fix for 5

chug_2

Hi all

I wonder if someone can give me some advice as I really dont know what to do. I have a mortgage of £100000 and Im about to switch it to a fix rate but I really dont know which one to choose. My current mortgage provider has given me the go ahead to change to fix rate without any charges apart from a switch charge which is good but Im a bit unsure which one to go for here are the 2 options:

1. Fix rate of 4.24% for 3 years

or

2. Fix rate of 4.59% for 5 years

Anyones advice would be much appreciated.

Thanks for reading

Zoe

robbiecaratiger

Hi Zoe

In your shoes I'd be taking the 4.59% over the 5 years as opposed to the 3 year option. May I ask what your LTV is and who your mortgage provider is ?

chug_2

Thanks robbiecaratiger

Yeah its with monmouthshire building society and my LTV is 80%.

I was thinking that the 5 years would be the better one because I feel the mortgages are starting to go up everywhere I just read on here that ING Direct are putting there variable up in August.

englandcrew

I recently just applied for a 5 year over a 3 year. Was around the same rates you mentioned.

Each to their own but I like the security for five years plus it means after three years I won't have to look again or pay fee again

chug_2

Thanks englandcrew. Thats what I was thinking as well was the saving on the charges. I think the charges are bound to go up by the time the 3 years up so then I could be worse off. Hmmmmmm decisions decisions lol

Phil_rich

Yeah go for the 5 years, depending on how many years you have left on the deals the 5 year rate is only £20 per month more on a 20 year plan. £20 x 3 years payments = £720 extra. Re-mortgaging again in 3 years will probably cost more than that so you would be worse off.

Cheers
PDR

chug_2

Thanks Phil_rich.

I have 27 years left so Im guessing it will be an extra £28 a month but still worth it I think.

Phil_rich

Yeah you would imagine so, about £1000 more over the first 3 years but then needing to re-mortgage will cost about the same and who knows what the rates will be in 3 years time? One thing is for sure and thats it the base rate wont be any lower.

Go for 5 and you wont have to think about it again until 2017. Unless you are likely to move house?

chug_2

Thanks for your help Phil_rich I'm going for the 5 years. This year we was lucky we only had to pay £99 switch and £77 valuation but like you say who knows what the charges will be like in 3 years time. I can't see the rates being the same as they are at the moment.

Thanks again