Should I get a 5 year fix or ten year fix

padington

My choice is between a natwest 5 year fix at £281 a Month or Santander 10 year fix at £331 a month.

Thoughts please.

shop-to-drop

Is it a forever house?

Are the fees the same?

Do they both allow any overpayments?

Going to be difficult for anyone but you to decide really just take everything into consideration.

padington

shop-to-drop wrote: »

Is it a forever house?

Are the fees the same?

Do they both allow any overpayments?

Going to be difficult for anyone but you to decide really just take everything into consideration.

I'll be here for ten years for sure. The 5 year is fee free the 10 year £750 (after the £250) cash back. Both allow 10% overpayments.


Key question for me is will interest rates jack up in 5 years time or not ? What are people's consider opinions on this.

dimbo61

Lots and Lots of people on tracker mortgages and the new bank of england boss has stated that the BOE base rate will not increase for 2/3 years but with a 10 year fix and the ability to overpay 10% each year you could be mortgage free in 10 years.
I had a 5 year fix and we overpaid as much as possible every month so we are nearly debt free so do not care about the Interest rate of our mortgage

dotdash79

10 years is a very long time to fix, A lot happens in 10 years will that home meet your needs in 10 years time.

padington

dotdash79 wrote: »

10 years is a very long time to fix, A lot happens in 10 years will that home meet your needs in 10 years time.

Good point I guess, what happens usually if you want to sell five years in on a ten year fix?

R_P_W

padington wrote: »

Good point I guess, what happens usually if you want to sell five years in on a ten year fix?

Usually a fee depending on the product, mine was 4% of the balance!

Thrugelmir

dimbo61 wrote: »

the new bank of england boss has stated that the BOE base rate will not increase for 2/3 years

Becareful how you quote him. As he didn't actually say this.

argomatt

dimbo61 wrote: »

Lots and Lots of people on tracker mortgages and the new bank of england boss has stated that the BOE base rate will not increase for 2/3 years but with a 10 year fix and the ability to overpay 10% each year you could be mortgage free in 10 years.
I had a 5 year fix and we overpaid as much as possible every month so we are nearly debt free so do not care about the Interest rate of our mortgage

Overpaying the maximum 10% each year won't make you mortgage free in 10 years.
The 10% means 10% of the balance at the start of each year, not 10% of the amount borrowed.

dimbo61

Come on guys the new BOE boss has said he does not expect the rate to increase in the next 2/3 years and it has been 0.5% since what March 2009
It you make the normal mortgage payments ( repayment ) and overpay by 10% of the outstanding balance each year you will owe little if anything after 10 years
The big question should be will I stay in this property for 10 years ?
You can sometimes PORT the debt to another property if the lender agrees

dotdash79

padington wrote: »

Good point I guess, what happens usually if you want to sell five years in on a ten year fix?

Depending on underwriting you should be able to move that part of the mortgage to a new place subject to the deal being re-underwritten at that point.

However you might find yourself needing more than your bank is willing to lend you. The interest on the new borrowing is extremely uncompetitive or worst still the lender not even doing any new lending.

The EPC might reduce over the years so at the start it might be 7% and in the finial year is could be 1%.