Which Term to take mortgage out

united4ever

So got to decide today but still deliberating:

2yrs at 2.45% (£995 arrangement fee) monthly repayment £690.83
2yrs at 3.09% (no fee) £762 monthly payments
5 years at 3.59% (£995 fee) £814.56 monthly payments
5 years at 3.89% (no fee) £839 monthly payments.

I know there is no way of knowing where interest rates will go but do any of these strike you as a better deal?

It's on a mortgage of £175k with me putting in 75K deposit:huh:

getmore4less

Follow on rates?

You can eliminate 2 of the option by crunching the numbers.

£175k mortgage over 29 years?
add the fees make the payment the same(£762) amount left in 2 years

£166,100 with fee
£167,301 without fee

Do the same for the 5year deals.

Thrugelmir

What are your plans between 2 and 5 years time?

united4ever

Thrugelmir wrote: »

What are your plans between 2 and 5 years time?

Just to pay the mortgage, stay in our current jobs, no more children and hopefully live in the house we plan to buy.

HappyMJ

united4ever wrote: »

Just to pay the mortgage, stay in our current jobs, no more children and hopefully live in the house we plan to buy.

Personally when I look a mortgage rates I look at the follow on rate. If it's 4% or less then it's quite good. If it's 5% or higher then it's pretty bad and would require you to re-mortgage to get a better rate. As the mortgage balance gets lower the costs of re-mortgaging every few years becomes higher in relation to the balance....and can you really be bothered looking for another one after 2 years or 5 years.