We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Should I get a 5 or 10 year fixed mortgage?
playaz
Posts: 270 Forumite
I have been doing some sums recently - and looking at a 3 bed house I have worked out it will cost around £385 a month on a 5 year fix with Santander (with no product fee).
Alternatively I could pay £413 a month with Yorkshire and get a 10 year fixed mortgage albeit with a £130 product fee.
I know nobody has a crystal ball and can gaze into the future but what does everyone think about really long deals such as 10 year fixed deals? Is it worth it or would I be best sticking with the 5 year deal which seems to be the 'norm' for most people.
Any advice would be truly welcomed! I am just about to accept a counteroffer and looking to put in my bid which will be accepted very shortly.
Alternatively I could pay £413 a month with Yorkshire and get a 10 year fixed mortgage albeit with a £130 product fee.
I know nobody has a crystal ball and can gaze into the future but what does everyone think about really long deals such as 10 year fixed deals? Is it worth it or would I be best sticking with the 5 year deal which seems to be the 'norm' for most people.
Any advice would be truly welcomed! I am just about to accept a counteroffer and looking to put in my bid which will be accepted very shortly.
0
Comments
-
Personally, if I was confident I would be living there for at least 10 years I would take the 10 year fix. Interest rates are only going to go one way from here.0
-
Personally, if I was confident I would be living there for at least 10 years I would take the 10 year fix. Interest rates are only going to go one way from here.
I believe so, but you never know what can happen I guess.
Sorry for the silly question but if I go with the 10 year fix would this give me any issues in the future should I decide to move after let's say 5 or 6 years? I have determined that no matter where I live I want to be there for at least 5 years (unless I get a neighbour from hell!)
0 -
I agree with Southend. If you can fix a mortgage as low as £413 a month for 10 years, that sounds good, as yes, the interest rates will more than likely go up quite soon. Also, it's much better value than £385 a month for 5 years.
That said, 10 years is a long time contract to get involved in for anything. You may want to sell in 4/5 years or less, so make sure that there is a get-out clause that says it isn't going to costs multiple 1000s (like £4 to £5K plus,) to get out of the deal.
On the one hand 10 years fixed mortgage sounds good, but on the other hand, it does tie you to that house a bit, and as I said, it could cause financial implications if you want to move in 4/5 years. Even if you stay with the same mortgage lender, a new home will mean a new mortgage, and that will effectively end the deal, and incur any charges due for severing that 10 year deal.Proud to have lost over 3 stone (45 pounds,) in the past year! :j Now a size 14!
You're not singing anymore........ You're not singing any-more!
0 -
I too would take the ten year fix. To know what I will always pay is good peace of mind to me.0
-
I believe so, but you never know what can happen I guess.
Sorry for the silly question but if I go with the 10 year fix would this give me any issues in the future should I decide to move after let's say 5 or 6 years? I have determined that no matter where I live I want to be there for at least 5 years (unless I get a neighbour from hell!)
The issue will be the early repayment charge. You may be able to avoid this if the mortgage is ported to another property. Best read the terms and conditions closely. The longer the fix, the higher the ERC. It could be something like 7% of outstanding balance on a 10 year fix."Real knowledge is to know the extent of one's ignorance" - Confucius0 -
The issue will be the early repayment charge. You may be able to avoid this if the mortgage is ported to another property. Best read the terms and conditions closely. The longer the fix, the higher the ERC. It could be something like 7% of outstanding balance on a 10 year fix.
That would be great if they would do that, but in the days I was buying (last time I bought was about 9-10 years back I think,) that wasn't possible. New house new deal. Maybe they can carry the deal over? Not sure if anyone does this though.
As you said, it may be a good idea to find out now, and read the terms and conditions carefully. But I know when we had a 5 year deal back in the very early 2000s, and moved house, we were only 2.5 years into the 5 years, and had to pay about two and a half grand back then to get out of the deal.Proud to have lost over 3 stone (45 pounds,) in the past year! :j Now a size 14!
You're not singing anymore........ You're not singing any-more!0 -
I believe so, but you never know what can happen I guess.
Sorry for the silly question but if I go with the 10 year fix would this give me any issues in the future should I decide to move after let's say 5 or 6 years? I have determined that no matter where I live I want to be there for at least 5 years (unless I get a neighbour from hell!)
Yes, there could be financial implications to get out of the deal. Best to find out first. Think of the worst case scenario.Proud to have lost over 3 stone (45 pounds,) in the past year! :j Now a size 14!
You're not singing anymore........ You're not singing any-more!0 -
That would be great if they would do that, but in the days I was buying (last time I bought was about 9-10 years back I think,) that wasn't possible. New house new deal. Maybe they can carry the deal over? Not sure if anyone does this though.
As you said, it may be a good idea to find out now, and read the terms and conditions carefully. But I know when we had a 5 year deal back in the very early 2000s, and moved house, we were only 2.5 years into the 5 years, and had to pay about two and a half grand back then to get out of the deal.
Most lenders will let you port. The caveat is that even with moving the mortgage to another property, the lender will still do all the checks of a new mortgage, and could refuse to port if their criteria are not met. I think some people could fall into a trap here with the new affordability checks."Real knowledge is to know the extent of one's ignorance" - Confucius0 -
Another lender recently launched a ten year fix with only a five year ERP.
As has been mentioned, to port the YBS rate on moving house, you have to be able to satisfy the lender's criteria and affordability checks at the time to port the rate to a new mortgage to keep it and avoid ERPs.
What if your circumstances have changed? YBS is a picky lender at the best of times and I suspect if you would have a problem, it would be with this lender.
In my experience, five years is enough and you could quite well find you drop out of the fix at the wrong point in the rate cycle just as easily on a ten year than you do with a five and have considerably less flexibility.
Still, it's all speculation, so who knows?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
I have been doing some sums recently - and looking at a 3 bed house I have worked out it will cost around £385 a month on a 5 year fix with Santander (with no product fee).
Alternatively I could pay £413 a month with Yorkshire and get a 10 year fixed mortgage albeit with a £130 product fee.
I know nobody has a crystal ball and can gaze into the future but what does everyone think about really long deals such as 10 year fixed deals? Is it worth it or would I be best sticking with the 5 year deal which seems to be the 'norm' for most people.
Any advice would be truly welcomed! I am just about to accept a counteroffer and looking to put in my bid which will be accepted very shortly.
What are the actual rates that they are getting fixed at?0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.1K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245.2K Work, Benefits & Business
- 600.8K Mortgages, Homes & Bills
- 177.5K Life & Family
- 259K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards