Fixed rate - 2 or 5 years?

london80s

My mortgage just came to the end of it's 5 year fix (was at 6.5%) and I was wondering, basing on my circumstances, on how to go about my next move.


I have been offered a rate of 4.1% fixed at two years and aim to be moving elsewhere within three years or so. Currently owe £165,000. With a fairly low rate would I be better off fixing for five? Or does it make the eventual move less hassle if I fix for two (and put the property on the market in 2/3 years).


Hope this makes sense!

dave1988

depends on circumstances really but if it was me i would opt for 5 year fixed

Yorkie1

A 2 year rate gives you the flexbility of not being tied in (i.e. risking having to pay a fee if you end it early) but also means that in 2 years' time you will be looking to remortgage again.

Given the preference for many lenders to place high fees on many products, and the other costs often involved in re-mortgaging (survey, legals), and that many people think rates are unlikely to go up that much in the next 2 years - it may be that if your circumstances are unlikely to change in the next 5 years then a 5 year rate might be worth considering. But you need to weigh up all the factors as nobody here knows your situation.