Please help me choose a fixed rate!

Poppy_Kennedy

Hi all

We are just approaching the end of a 5 year fixed rate of a whopping 5.59% which was on part repayment and part interest. I do not want to make any mistakes as feel we have paid way over the odds for the last 5 years barely making a dent on our mortgage.

Santander who is our lender has offered us the following rates based on a mortgage of £257,000 over a period of 17 years, our property is worth around £480,000-500,000. We may borrow an extra £5-7,000 for a new roof.

2 year fixed: 1.99 %
3 year fixed: 2.69 %
5 year fixed: 3.09%

Many thanks

Thrugelmir

Any fees on the products?

Are overpayments allowed?

Poppy_Kennedy

thanks for your response.

All will have booking fee of around £400.00 sorry i cannot be more specific, exact details of that are at home.

Poppy_Kennedy

ps. we will not be able to overpay unfortunately...

dimbo61

5 year fixed rate of a whopping 5.59%

5 year fixed: 3.09%

£257,000 over a period of 17 years,

ps. we will not be able to overpay unfortunately...

Long term security need I say more ?

Thrugelmir

If finances are tight then 5 year fix seems the best option.

Otherwise you run the risk of what rates might rise to.

I should add really it's personal choice. There's no right or wrong answer. As only history will determine the outcome. Peace of mind however is priceless in my view.

Alphamare

If you can't overpay I would personally fix for five years to makes bigger sent in your ltv before you need to fix again.

It also gives you the most security against rates rising which they will

Poppy_Kennedy

Thanks both - we wanted long term security last time and ended up on a high rate im worried about making the same mistake again.

As we are paying £1,500 we cannot afford to pay any morethan that and will be knocking around 900 off the capital each month.

Thanks for your advice, i know its hard to tell me what todo but i just do not want to make a mistake like last time…

Mrs_Rachel_Trelfa

Last time was not a mistake as you put it because you probably looked at fixing incase the rates went higher?

Are you able to put the difference between your repayment on the 5.59% and what it would be on the 3.09% in a savings account over 5 years and when you come off the fix you will hav a chunk to knock off the capital?

Thrugelmir

Poppy_Kennedy wrote: »

Thanks for your advice, i know its hard to tell me what todo but i just do not want to make a mistake like last time…

Could you have coped with a 2% or 3% rise in interest rates? Then not taking a fixed rate product would have been a mistake.

Poppy_Kennedy

Thanks all,

Mrs Rachel - we were on part and part last time as the full repayment would have been 1,800 (i work part time as two small children)

Thrugelmir: good point!

i think you have all helped me come to the decision that a 5 year fixed woudl be best as we cannot afford to pay any more than £1,500 unless we extend the 17 year term.

i have worked out in 5 years we will have paid £54,480 off the capital. I just want to check that it is portable as would like to move in 3-5 years

thank you