FTB - what mortgage to go for?

atruefaker

Hello All

I have had an offer accepted and am off to see the mortgage advisor tomorrow at Santander (I have to go with them due to my job, and the amount they will lend me).

LTV is 75%, and I am unsure about what mortgage to go for. I have three options:

1) 2 year fixed - 2.74% - £995 (fee)
monthly mortgage: £1431

2) 2 year Tracker rate (variable) - 2.74% (+2.24% above base rate) - £995 (fee)
monthly mortgage: £1431

3) 5 year fixed - 3.39% - £995 (fee)
monthly mortgage: £1555

My brother is insistent that the 2 year tracker rate (+2.24% above base) is the best as rates are not going up anytime soon and could potentially go down, but on the other hand knowing what I will pay each month for 5 years is also a positive.

Does anyone have one have any thoughts on how to break this down best, and how to work out the best way to work out which mortgage I should choose please?

Thanks in advance for any advice.

HappyMJ

Rates won't be going down much more. Maybe a few more competitive deals might come out and they'll be 0.25% or 0.5% cheaper but it isn't much.

I like the 5 year deal myself but would require interest rates to rise a little bit to actually save anything....but....the revert to rate on the 2 year fixed rate would be higher than the 5 year fix so although it costs more for the first 2 years the next 3 years will be cheaper. I'm not one for switching every 2 years so I'd look for a good long term variable rate after the introductory period has expired. They are mostly about the 4% mark....Santander's is 4.74%.