First time buyers - fix at 2 or 5 yrs?

We3

Hi there. We're first time buyers with a LTV of 85%. Considering fixing at 2 years for 2.99% or alternatively 5 years at 3.99%. We could overpay on the 2 year more comfortably.

What are people's thoughts?

mrginge

2yrs all the way for me

HappyMJ

For me it's all down to the revert to rate. Anything under 4% and I'll consider it. Anything over 4.5% and I won't consider it. I'm not into switching every two years. The majority of the interest on a mortgage will be charged at the SVR so the lower that is the better.

Yorkie1

Bear in mind that changing to a new mortgage carries costs, so factor that into your calculations.

We3

Both the 2 and 5 revert to 3.94. We're thinking of going for the 2 year.

Butti

Is 3.94 the SVR now? It will be higher in either 2 years or 5 as interest rates are being held artificially low at the moment.

dimbo61

Think about it?
Are you going to live in this property for at least 2/3/5 years!
What will the LTV be in 2 years ( you pay very little off in the first couple of years)
Use " whatsthecost" to see how much you will have paid off.
Now do the same with a 5 year term.
If you are going for a one bed flat and want kids ASAP then a 2 year deal maybe perfect.
3/4 bed house and top of your affordability then a longer fix may help you when the kids are young!!!!