2yr fix or 5yr fix

Cassio

Hi all,

I can get a 2yr fix at 3.09% with a £1900 cashback inducement or..
a 5 yr fix at 3.69% without an inducement.

Which to take? Any MSErs have a view they'd like to share?

Thanks

Smoggie69

I was trying to work out what would be the best length of time to fix for when we eventually move house. I am leaning towards a 2 year fixed deal in the hope that a) I will be able to drop down a LTV bracket after 2 years and hopefully get a lower rate, and b) that interest rates will not go up by too much in the next 2 years. After 2 I was thinking of getting a longer term deal in case rates go up, therefore having a lower rate for a longer period of time. This will probably depend on your own perception of interest rates.

Also, having gone through a 5 year fix I found it a bit tooo long, although the rates were dropping over this time, and the SVR now is lower than my fixed rate from 2007.

Have you looked at the fixed rate mortgage comparison calculator?

Can you pay the cashback off the mortgage straight away?

IainHL

The answer to your question really depends on what rate the 2 year fix reverts to when it ends.

amnblog

The answer has a lot to do with what your personal plans as a borrower are over the next 5 years.

The rate is just a function of the product.

Whether your needs are best served through a two year fix or longer is the key issue.