First Time Buyer - mortgage questions

japmis

Hi

I lost my dad a couple of years ago and he would've answered (and helped) all my mortgage and house buying questions... so I'm at a bit of a loss and I have some basic questions about mortgages:

1. I'm erring on a fixed rate mortgage, but how long should I fix for? What are the pros and cons? I was thinking about just fixing for 2 years..... but then what happens when that period ends? Do I have to re-mortgage? Am I better off fixing for a longer duration? What happens if I want to rent it out whilst I'm still under the fixed term?

I'm wary of asking banks etc as I always feel they are biased.

Thanks in advance

japmis
(30,female,Berkshire)

Jimbo1976

Hello

It is difficult to give advice on how long to fix without knowing a lot more about your circumstances.

There is always a dilemma on how long to fix, the shorter the fix the lower the rate. Personally I have always though that fixed rates are good for first time buyers as it gives them budgetary stability. You know where you are.

I am slightly wary of 5-year fixed rates for FTB's as typically when you are younger your life can go in more directions then when you are older and established. I would be more inclined to go for a 3-year fixed rate than a 2 as i don't think rates will go up much in the next couple of years.

If you want to rent it out, you have to ask for "consent to let" from your lender. The response will wary from lender to lender, some are happy to allow you to do this once you've been there for a while, others will say no.

At the end of your fixed rate, you can either go onto your lenders standard variable rate, some lenders will offer existing borrowers new fixed or tracker rates or you can remortgage to a lender lender (subject to credit status, income, property value etc)

Good luck

ACG

If you fix your tied into that deal for however many years you choose.
The pros for tieing in for 2 or 3 years is that the rates are usually less than a 5 or 10 year fixed period.
The cons are that after the fixed period you revert to the lenders standard variable rate (SVR) which could be more (or less) than the fixed deal - it can fluctuate and so your not sure what you will be paying one month to the next (although it doesnt usually change too much in one go).

We cant recommend on here if your looking for advise you would really need to go and speak to a broker, who can do a full factfind (which takes maybe an hour).