Is It a Good Time to Get a 5-Year Fixed for FTB?

Odie_Schmodie

I had a mortgage application in place for a property purchase that fell through. I had supposed "financial advice" from the broker that was linked with the EA for that sale, and we decided on a 3-year fixed with Accord (which is 2.29% for the deposit I had but then reverts to a 5.99%). I now of course lost the valuation fees etc after I had to pull out of the sale due to the separate, independent survey I had done on the property (which marked the value down, though Accord's valuation didn't). At the time I wasn't very clued up and the supposed "helpful broker" didn't highlight that the 3-year fixed actually has a deadline (rather than "3 Years") so if I can buy another property it will be more like 2 years and 8 months or so, tops. Although I went in thinking I have almost everything ready for the mortgage offer in place, I am now thinking about ditching that previous application (where I had been all but received the offer) it might be better to get a 5-year fixed. The best rates for my house value/deposit ratio are 2.69% from Chelsea and 2.84% from YBS. Is it a good time to fix for 5 years? Or should I go with the arrangement I have in place rather than start all over again with another lender? How hefty are remortgaging costs- I have no idea! I am so confused, any feedback is hugely appreciated!!

hcb42

For rates as low as that I would fix. However you need to consider early repayment charges and product fees.

Kynthia

I'm looking at the same five year fixes and wondering what's best, but don't forget their fees. Considering they aren't much more than your Accord offer they are attractive. Rates are unlikely to be lower when your Accord deal comes to an end and you'll more than likely gave to pay another product fee if you want you avoid the SVR. However as you've already paid your current product fee and won't get that back, I can see it's a tough choice to decide to pay an additional £1 to 1.6k. Do you think your income will rise over the next five years, if not then it might be worth paying out again to have the security of fixed outgoings for a longer period of time?

ch3101

If I were you I'd fix for 5 years. As long as you know you won't need to move or remortgage for any reason in the next 5 years.

dimbo61

Think the 2.69% five year fix is with YBS fee £1345
Now the YBS ave is 4.99% while the Chelsea ave is 5.79% and Accord ave is 5.99%
All three lenders belong to YBS !!!!
Go to your local YBS branch and apply to YBS direct

ACG

As a first time buyer its important to think about your plans.

- Do you intend to have kids,
- Are you buying a loan and will a potential partner move in?
- Does your job involve moving around?
- In essence, is there anything that is likely to happen which will make your property unsuitable where you will need to move within the 5 years?

Its not a major problem if there is as you may be able to port the mortgage, but in order to port you need to meet the lenders criteria at the time of the move.

Odie_Schmodie

Thank you everyone so much for the super helpful feedback! I am a FTB but mostly because I moved to the UK from the US only 8 years ago, I am probably about 15 years older then the average FTB, don't and by now clear that won't have kids, no partner (and it does get less likely in middle-age doen't it :-) ) stable mid-career job, on a payscale with regular rises so income should reliably go up in the next 2-4 years (and possibly beyond). So, I think I am as stable as they come in terms of change of circumstances. (UK citizen now and well embedded etc.) I just spoke with Accord and because I never got as far as getting the mortgage actually set up the only fees I would forfeit (in addition to the valuation fee that was just £270) is the £130 application fee. So, no reason not to shop around and tie in for longer. I didn't realize when it comes to remortgaging you have to pay solicitor and survey fees again, which I suppose does need to be considered alongside mortgage product fees... Interestingly, even though Accord and YBS are "the same institution" Accord tells me though that all the paperwork must be started from scratch if I apply for a YBS mortgage- go figure! And yes thanks Dimbo- Direct is the way to go- The broker handling this has been truly awful! I'd much rather take matters in my own hands from now on. PS - I am using the Moneysupermarket.com comparison site- is this the best site or would anyone recommend something else?

Kynthia

I was using this one last night and like it. I was able to see the total cost over different years and fine tune the results to include overpayments allowed, different fixed terms and fixed term offsets.
https://compare.moneyadviceservice.org.uk/mortgages/Step1

However if anyone knows one that shows the total interest paid over the fixed term, rather than total payments made or interest over the life of the mortgage, I'd be grateful.

dimbo61

I like " whatsthecost "

Odie_Schmodie

Wow, thanks again- both of these are really helpful. I do like the moneyadviceservice website best though because of the way it allows you to compare payments on a mortgage over any selected period. It does seem like a good time to fix for 5 years actually, as I hadn't appreciated (being a FTB) that the interest rates are so very low for that sort of arrangement, historically speaking.