Have I made a poor choice with my mortgage?

redrabbit29

I'm a FTB. I bought a house a year ago and chose the following mortgage:

Post office
Fixed for 5 years
4.99%
This was based on a 10% deposit and my single income.

I see loads of other officers which are less because it's variable or tracker. I justified my choice by thinking "at least I know it's fixed and what I'll pay for 5 years".

I've got 4 years left on this mortgage deal.

Have I made a bad choice?

Thrugelmir

redrabbit29 wrote: »

Have I made a bad choice?

Why do you think its bad? You had various options and choose the one that suited you. Given the uncertainty in financial markets. Anything may happen in the next 4 years.

If you can afford to overpay your mortgage. That'll save you money.

ACG

Different deals are suitable for different people.

For instance, i went with a 2 year tracker - i did that as i dont think rates will go up in those 2 years. It also kept my payments much lower which meant i could afford to do a 25 year term instead of what would have been 27-28 years for a higher rate.
It sounds like you didnt want to take the gamble so have gone with a relatively long fixed rate. The benefits to you are that you can budget for the next 4 years, you also dont have to pay any booking fees in 2 years time for a new mortgage (which i might have to).

Its all about what suits you.
If your going purely off rate, then no you didnt do a great job. But i dont think for 1 minute the rate was your deciding factor, in which case you probably havnt done too badly.

redrabbit29

Thanks everyone.

It's only because I'm struggling with it. Not seriously, just the same old FTB issues of budgeting.

It did suit me at the time, so I think I'm just over thinking it.

Thrugelmir

redrabbit29 wrote: »

Thanks everyone.

It's only because I'm struggling with it. Not seriously, just the same old FTB issues of budgeting.

It did suit me at the time, so I think I'm just over thinking it.

First few years are often the most challenging.

Well worth it though.

dimbo61

You have 5 years secuity and have the chance to overpay saving you 4.99% tax free !!!
What is important is the LTV in 5 years so overpay if possible.

kingstreet

At 90% you wouldn't have got much less either way.

jamesml

Just think how much worse your budgeting would be if you had gone for a short term fix, and then rates had gone up/go up in the next few years.

I have also fixed for 5 years at a similar rate. Not the best rate I could have got in the short term, but the security was worth it, along with the lack of having to potentially pay an arrangement fee in a couple of years, the hassle of trying to find a new product, dealing with potentially low LTV in the first couple of years, plus of course the potential that future rates go up.

opinions4u

Look closely at budgeting.

I was paying 15.4% in the early years of my first mortgage.