Considering a 10 Year fix - Thoughts?

quantumleap

My wife and I are remortgaging at the moment. Our property has recently been valued at £135K and we are remortgaging for 65K and have 15 years remaining.

There are a few 10 year fixes available at the moment and I am tempted. The ERC are high but we are 41 and 37 years old, 3 kids added an extension a few years back and have no inclination to move.

The deal I'm most interested in is with nationwide. Its a 10 year fix, 3.59% with a monthly cost of £467.55.

I'd appreciate any thoughts/views?

amnblog

10 year fixes make me nervous. Who really knows their plans 10 years ahead?


Make sure you can live with the early repayment charges


7% of loan to be paid within first 4 Years, Then 6% of loan to be paid for next year, Then 5% of loan to be paid for next year, Then 4% of loan to be paid for next year, Then 3% of loan to be paid for next year, Then 2% of loan to be paid for next year, Then 1% of loan to be paid for next year

quantumleap

I think the fact I'm asking on here suggests to me that I'm a bit nervous about it myself.

I appreciate your thoughts.

notanewuser

We went for a 10 year fix remortgage just before the crash in 2008. Rate of 5.5%ish but of no relevance due to it being an offset mortgage. Within 2 years it was fully offset and we haven't paid a penny in interest since.

It was important to us to know what our monthly payment would be for most of the life of the mortgage (20 years). We have the flexibility to re borrow up to the level of the original mortgage at the clock of a button if we so choose.

stator

If you think you might struggle with interest rates above 3.59% then fixing could be the right course.
If you plan on moving within the 10 years I wouldn't. Is it possible you might want to upgrade to a bigger house? Is it possible you might want/have to move job to somewhere further away?

quantumleap

stator wrote: »

If you think you might struggle with interest rates above 3.59% then fixing could be the right course.
If you plan on moving within the 10 years I wouldn't. Is it possible you might want to upgrade to a bigger house? Is it possible you might want/have to move job to somewhere further away?

Its not that I might struggle with IR above 3.59% - the question I'm asking myself is how likely am I to get an interest rate of 3.59% in 5 years time (if I take a 5 year fix). My own thoughts are that interest rates are likely to rise steadily and in small incriments in the coming years, making a 5 year fix of 3.59% in 5 years time unlikely.

We extended a few years ago, so no need to move. I've working in the same place for 13 years and am not intending to look elsewhere. Job is as secure as any job can be, I guess.

steeeb

My opinion, clearly not knowing enough about you as to whether you do this or not.

It's unlikely we'll see interest rates massively rise in the future - and if we do, the stupid 5% lending that was going on straight after the crash (it's more stricter now) will no doubt cause another crash of sorts.

Even if it did, you'll have a very good LTV, so I wouldn't worry about it.

You'll get a better rate now on a shorter fix, but I'd also advise as well as having a buffer of savings to also overpay on the mortgage to get it down - perhaps an offset would have the same effect.

It gives you security should you have to move in the future, but also in a lot of cases will save you money.

But I guess if you want the security of a fixed monthly rate and big charges should everything not go to plan then go for that route instead.

ACG

10 year fixes are not a bad idea if you want to protect against rate rises long term and are confident you will not be moving (good stable jobs, strong family ties to the area, house is ideal for your current and future circumstances... no more kids or are buying in preparation for kids etc).

I have only done 1 in 3 years.

Once you go through all of the above with clients they tend to back out of doing a 10 year rate as its difficult to know what will happen in 2-3 years let alone 10.

quantumleap

ACG wrote: »

10 year fixes are not a bad idea if you want to protect against rate rises long term and are confident you will not be moving (good stable jobs, strong family ties to the area, house is ideal for your current and future circumstances... no more kids or are buying in preparation for kids etc).

I have only done 1 in 3 years.

Once you go through all of the above with clients they tend to back out of doing a 10 year rate as its difficult to know what will happen in 2-3 years let alone 10.

The conditions you've set in paragraph 1 are all true of me which is why I've considered a 10 year fix. However, having given it some thought and considered the replies here I'm edging toward a 5 year fix. My last 2 remortgages have been 5 year fixes and they have worked quite well. I appreciate 10 years is a long time - who knows what might happen!

Thrugelmir

What interest rate are you currently paying?

quantumleap

Current interest rate is 4.59%. Deal expired on 31/10. I'm a bit late getting it sorted to be honest! Unlike me but there you go!