Should I get a 5 or 10 year fixed mortgage?

playaz

gazter wrote: »

What are the actual rates that they are getting fixed at?

The rates are 3.44 & the other is 4.14 with Santander & Yorkshire respectively

Annie1960

The Bank of England base rate is still at an emergency low level of 0.5%. It is likely to start going up soon.

As others have said, a 10 year fix is by far the best value, as long as you don't incur any severe penalties if you move house before this. So check it out.

Remember that bankers lie, so don't take their word for it, check what it says in the small print.

Calculate what it would cost you if you moved house in 5 years, compare this with the 5 year fix, and that should give you your answer.

Leo2020

Our mortgage advisor has just advised us to go for a 2 year fix rather than 5. The reason being is that we have over paid our mortgage and he thinks that in 2 years we will probably have paid off enough to be a lower LTV ratio so will get a better deal in 2 years. Its still a gamble but then again it always is because you dont know what's going to happen in the future.

Kynthia

Everyone has to look at their own circumstances, how they'll change over the next 2/5/10 years and how they personally would be affected by any interest rate rises.

I decided on a 5 year fix. I ruled out a 2 year because our income is likely to drop in that time so we may not qualify for such a good deal and I'd like to have a stable repayment amount for a longer time as an increase in interest rates would affect us more. Plus we won't have dropped a LTV level in such a short time, especially if house prices drop to lower than now and such fluctuation are more likely over such a short period of time.

I decided against a 10 year fix as the extra we'd pay over the next 5 years compared to our 5 year fix seemed a lot. Plus it's hard to say we'll want to stay in the property 10 years. Yet in 5 years time our income should be soon to rise a bit and even if property prices haven't risen much our LTV will have dropped enough to get us the better deals at the time.

However someone else may be more likely to move sooner, considering becoming self employed or part time so would struggle to remortgage, know that their income is likely to increase, already be borrowing a very low LTV, etc. So would make different choices.

Paul_the_Painter

How about taking the 5 year fix, and using the excess to overpay by £350/yr, including interest saved, you should have about £1850 saved off your mortgage? From the numbers I would guess you are looking at about a £55,000 mortgage, that's 3.5% of the mortgage gone!

ruggedtoast

Interest rates are going up up up UP UP UP UP AND AWAY!!!

:beer::beer::beer:
:j:j:j:j

:T:T:T:T

:eek:

thelem

Check if you're allowed to make any early repayments if you had some spare money. For example, my mortgage allows £500/month overpayments for no extra cost, which has allowed me to knock a couple of years off my mortgage.

This, combined with local market conditions, mean I've gone from 15% equity to about 35% equity in 2 years, which means I'm now regretting locking myself into a 4 year fix as I'd now be able to get a cheaper rate by remortgaging. The same probably doesn't apply now though, as interest rates are almost certainly going to rise over the next two years.

movilogo

What APR% rate you are getting? Depending on that, you may be better of with a lifetime tracker rate. Usually trackers never have ERC. Yes, base rate will rise invariably but you can still be better off in long run.

Lily-Rose_3

Annie1960 wrote: »

The Bank of England base rate is still at an emergency low level of 0.5%. It is likely to start going up soon.

As others have said, a 10 year fix is by far the best value, as long as you don't incur any severe penalties if you move house before this. So check it out.

Remember that bankers lie, so don't take their word for it, check what it says in the small print.

Calculate what it would cost you if you moved house in 5 years, compare this with the 5 year fix, and that should give you your answer.

:eek:

Surely not?! You'll be saying estate agents and politicians lie next!