How long to fix for with high rate

Kimbodia

Hi All,

My first post. I'm hoping there are some mortgage minded people that can guide me with which mortgage to go with.

The rate is high but its our circumstances so I knew this would be the case, husband is a contractor, I'm a housewife at the moment so with one wage and wanting a fair sum of money at 85% LTV the rate was never gonna be great, but thats not what I require advice on, just explaining now before you all tell me how awful the rates are!

So the option is do we fix for 2 years at 4.69% or 5 years at 4.99%? We're paying a £499 broker fee, £999 mortgage arrangement fee and £430 for the mortgage valuation. Mortgage is with Halifax.

Despite the high rate I'm drawn to the 5 year fixed as given the almost £2k outlay we'll be looking at paying close to that in 2 years if we go for a new deal rather than go on the SVR. If we go with the 5 year deal I'm anticipating I will be back at work by the time we come to remortgage and thus will have much better deals on the table.

I'd appreciate people more clued up than myself to give their thoughts.

Many thanks

bigadaj

Differen e in rate is small so 5 year fix looks better, particularly as you're looking at a new set of fees in 2 years for the other option. Rates don't look like moving for a good while, main reason for shorter fix would be improved financial position, if you're back at work this might get a better deal, but is only a strong option if you could overpay to get a better rate ie get below 75% or similar hurdle.

Kimbodia

Thanks for your comment.

Does anybody else have any advice for me?

Is there any way of forseeing what a lenders SVR may be in 2 years time?? or would it just be guessing ???

dimbo61

In 2005 we took out a 5 year fix at 4.74% with 50% LTV and we managed to overpay every spare penny.
If you take the 5 year fix you will I hope have a LTV of 75% in 5 years and be in a better position with jobs and income