5-year Fixed or 2-year Discounted

marathonic

Which to go for -

• a 5-year fixed rate at 4.25% with a £499 arrangement fee reverting to 4.49% SVR.
• a 2-year discounted rate at 2.9% with no arrangement fee reverting to 4% SVR

I think the 'reverted to' rate should be effectively ignored as it could be anything by the time the 2/5 years is up.

The problem is, the discounted rate is what I chose initially and have applied already. However, it's with Ulster Bank and the application was made on the day the current fiasco started - 2 weeks ago.

They can tell me nothing about the status of the application or when it will be processed so I'm tempted to switch to the other bank for the fixed rate.

Which would you go for if you were me and would your desicion be based on you liking that rate better or you avoiding the uncertainty with Ulster Bank?

I can see Ulster Bank raising their SVR in the future to recoup the costs of the current fiasco.

Phil_rich

Depends how much you owe and how many years remaining, IMO.

marathonic

It'll be a new mortgage for 100k taken over 25 or 30 years...

dimbo61

Do you live in Ireland ? ulster bank !
Is this your long term home or first time pad ( young free and SINGLE ) ?
I would take the 5 year fix for security and overpay every month ( if allowed and you can afford to! )
It gives you time to build up equity in your home so that when you need to remortgage you have the best LTV to get the best deals
Only by views Good Luck

marathonic

Currently living in the Republic of Ireland but moving to Northern Ireland - Ulster Bank and Bank of Ireland operate on both sides of the border.

I'm a single FTB but it's a long-term home. Basically, I've looked at 2 bedroom new build apartments that have been repossesed and being sold by the bank. They are available at half the price of the house I've had an offer accepted on.

The apartment would be cheaper for the mortgage (due to being half the price AND on a better LTV) as well as the council tax and bills.

However, when I'm no longer free-and-single in the future, I'd have to sell and move to a house. For this reason, I decided to push-the-boat out and go for the house now.

The way I look at it, it might be saving £1,000 - £1,500 per year by buying the apartment but I'd be spending £5,000 - £6,000 on the trade-up in a few years (as well as possibly more money due to rising prices - whenever they come).

dimbo61

You also end up paying management fees to have the roof, hallways, garden maintained.
I prefer houses as you only have neighbours at each side and not above and below you!
We still have know idea of LTV now and the deposit you are putting down ?
But I still prefer the security of a 5 year fix on the biggest expense each month ( your brand new mortgage )
It costs big style to move house every 3/4 years so buy the best you can afford