5 or 10 Year Fixed Rate

malko

okay i am just about to remortgage for £91k and i cant decide if i want to go with Nationwide 5.78% over 5 years with 3% ERC or Woolwhich 5.57% over 10 years with 6% ERC.

I am 31, single with no kids so i am not sure if a 10 year deal is right for me. I mean i know they are portable but i'm just not sure if its too long a commitment for me.

I'm looking at the history of BOE base rates and while i know nothing about the economy (! :rotfl:) it seems like they have went up and down in 5 year blocks. What i dont want to happen is to be paying 5.57% when i could have 4.57% in say 6 years time (just an arbitrary figure!)

Opinions always welcome

Generali

It depends on which you consider to be the bigger risk:

- Rates rising to such a level that you can't afford to repay and you lose your house.
- Paying over the odds by 1% or maybe 2% at the most (2% pa on 91k is £152 pm)

I'd chose the former but then I've got kids (so would be very miffed to be repo'd, if I owned a house that is) and £150 pm isn't that much to me. The choice is yours.

malko

hmmm well i could afford to pay a lot more on my mortgage as i havent borrowed nearly as much as i can.

I'm torn between a 3 year or a 5 year now

21castlehill

I'm 1 year into my 3rd 5 year fixed deal & they've done me just fine, currently 4.79% & hopefully by the end of this one I'll have enough saved just to pay it off 6 years early. I've read somewhere that the average house is sold every 7 years, which fits with my housing history just about right. So I guess I've saved myself 3 sets of ERC's. Really just your own preference at the end of the day, fixed rates you win some months & loose others.

malko

hmmmm its tricky. think i might try to find a 3 year and if not go with a 5 year. want to get it sorted this week. been meaning to do this for 3 months now and keep missing interest rate changes!