Which fix is best?

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homehunter wrote: »

Frustrating isn't it? We are coming to the end of a 5 year fix at 5.69%. All the advice we took in 2009 said to expect rates to go up. They didn't. .

We were in the same position, we actually dumped our 5 year 5.99 % fix in favour of a 3.99% 5 year fix and paid the erc's. We kept the monthly payments at the same amount but reduced the term by 5 years. Just renewed at 3.49%.
I like longer term fixes, no nasty surprises or looking for new deals.

Tykva

If it is your first mortgage (same as us), I personally think 3 years is best to fix. 5 years are too long and not to have regrets as many who fixed for this periods in 2009 do now.
- You can use whatever money left if you have fixed for 5 years to make overpayments on 3 years.
- Remortgages are always cheaper than first time buyer.
- Besides in 3 years time your LTV will be higher, which means your remortgage will be even cheaper.

Yorkie1

Tykva wrote: »

If it is your first mortgage (same as us), I personally think 3 years is best to fix. 5 years are too long and not to have regrets as many who fixed for this periods in 2009 do now.
- You can use whatever money left if you have fixed for 5 years to make overpayments on 3 years.
- Remortgages are always cheaper than first time buyer.
- Besides in 3 years time your LTV will be higher, which means your remortgage will be even cheaper.

Sorry but I disagree with some of your points.

If someone knows that they are not going to move within the next 5 years, and wants a fix, then I would certainly consider the longer fix.

The issue about remortgages vs FTB is irrelevant as we are discussing remortgage in 3 years vs remortgage in 5 yrs.

In 3 years time the LTV will be lower (not higher) and there is no guarantee that it will have reduced sufficiently to make a different to interest rate bandings, particularly as you pay mostly interest at the start of a mortgage.

In 3 years' time interest rates will certainly be higher than they are now; if there is little difference between a 3 year and 5 year rate now then the 5 year fix would financially seem a decent option.

newbridge

bex0309 wrote: »

Oh, and no arrangement fee, £250 cashback, they pay for valuation and a portion towards legal fees - we were very pleased with Santander (if you don't mind waiting AGES for approval).

didnt knew about legal fees. what % was that?