Fix for 2 years or 5 years?

jelltot

We're just about to come to the end of our 2 year fixed rate mortgage with Woolwich, having bought our first house 2 years ago.

We want to fix the mortgage again, the question is for how long! I'm not going to be earning from Sept for 12 months as I'm starting teacher training, so we want to know where we are with payments.

We're pretty sure we want to stay with Woolwich - we've had a quick look round and taking into account fees and hassle etc, we don't think it would be worth switching provider (although if anyone out there has seen deals which could change our minds, please let me know!).

Our LTV is 79% - we've got 33 years left on the term.

Basically we have been offered the following;

2 year fixed @ 2.39% initial rate - monthly repayments of £324
5 year fixed @ 3.69% initial rate - monthly repayments of £387

Our monthly repayments currently are £392.00, so with both we'd be saving money.

Obviously the difference between the two of £63 a month over 24 months adds up to a pretty nice sum of £1500 ish! HOWEVER.... will we live to regret just fixing for 2 years?! We're slightly scared of coming off the fixed rate in 2 years time, interest rates having gone up, and regretting not fixing for longer (albeit being more expensive for now)

Any advice/loans of crystal balls greatly appreciated! We are going round in circles.

Thanks!!

Idiophreak

jelltot wrote: »

We're just about to come to the end of our 2 year fixed rate mortgage with Woolwich, having bought our first house 2 years ago.

We want to fix the mortgage again, the question is for how long! I'm not going to be earning from Sept for 12 months as I'm starting teacher training, so we want to know where we are with payments.

We're pretty sure we want to stay with Woolwich - we've had a quick look round and taking into account fees and hassle etc, we don't think it would be worth switching provider (although if anyone out there has seen deals which could change our minds, please let me know!).

Our LTV is 79% - we've got 33 years left on the term.

Basically we have been offered the following;

2 year fixed @ 2.39% initial rate - monthly repayments of £324
5 year fixed @ 3.69% initial rate - monthly repayments of £387

Our monthly repayments currently are £392.00, so with both we'd be saving money.

Obviously the difference between the two of £63 a month over 24 months adds up to a pretty nice sum of £1500 ish! HOWEVER.... will we live to regret just fixing for 2 years?! We're slightly scared of coming off the fixed rate in 2 years time, interest rates having gone up, and regretting not fixing for longer (albeit being more expensive for now)

Any advice/loans of crystal balls greatly appreciated! We are going round in circles.

Thanks!!

Not sure you really need a crystal ball?

Odds on it'll cost you £1500+ to re-mortgage in 2 years' time. Plus hassle... and let's face it...interest rates aren't going to go down in the next 5 years...

amnblog

This same question comes up on here every couple of weeks.

The best option for you depends on your circumstances and your attitude to outlay and risk.

This is where professional advice would be useful to you.

Of course, you could discuss it with the bank but any discussion on your best options with them will lead to thme putting you into their advice process and your having to satisfy them you are still a good risk.

A good broker could point you in the right direction for your circumstances without involving the bank.

jelltot

Thanks for the advice! I think we're leaning towards fixing for the 5 years so we know where we are - my partner's potentially thinking about a bit of a career change in the future as well so it means it would make that decision much easier if we weren't worrying about fixed term coming to an end.

Alias_Omega

We fixed for 5 years at 6.02% before the rates fell. We did this because we new what we would need to pay for the next 5 years.

If I could fix for 30years, I would fix it...

My wages are fixed, therefore I want my mortgage fixed...

kidmugsy

jelltot wrote: »

we've got 33 years left on the term.

How very far-sighted of you.