3yr fixed @ 4.49% or 2yr fixed @ 3.99% but with £499 fee

TangoFiver

Ok so I'm very tired at the moment, and I can't work out which one would be better!

Basically, we're selling our house and buying another, and as such are borrowing some more money off our mortgage provider - Yorkshire Bank.

They've said they can do this by offering us another - separate - mortgage, one of the two mentioned in the title of this thread.

Currently we're on a 5yr fixed with them which ends in Sept 2014, and would ideally like to 'combine' the two mortgages at the end of the fixed term.

I'm thinking we pay £499 for the 2yr fixed which would then mean we could combine the two different mortgaged in just over 2 years time...

...does that sound the best way of going about things??

Thanks for any help/advice :beer:

betmunch

Unless you know what rates will be available at the end of the 2 or 3 year period (which you dont) then there is no right or wrong answer, only a logical decision based on what you think.

You have a clear reason for taking the 2 year deal, meaning you can combine the two parts of the loan earlier.

To take the 3 year deal you are speculating on what rates might do in the final year of the fix.

TangoFiver

betmunch wrote: »

You have a clear reason for taking the 2 year deal, meaning you can combine the two parts of the loan earlier.

That's what I was thinking, but wasn't sure if I was applying clear reasoning or just looking through tired eyes!

Thank you! :beer: