3 or 5 year fixed, not sure what to for the best!!

amnblog

Morris Albert syndrome

getmore4less

amnblog wrote: »

With most borrowers however, it is not about the maths or the market - it is about how they feel about things.

If they were given the real numbers so they can start to asses the trade offs and risks especially going beyond the short term deals and monthly figures their feeling may change.

The main issue is the "do you want to know your payment for X years by going for a fixed" is the easy sell.

amnblog

You can run the maths any way you want - feelings are feelings...nothing more than feelings...

Waldorf_Statler

You've got to ask yourself, are you feeling lucky (punk)?

I've always fixed my mortgage, and I've always ended up paying more than if i'd let it ride on a tracker or fixed for a shorter time. But I tell myself I don't like to gamble with my family's home if rates took a sharp upwards turn. I take risk in the stock market with investments and pension so I don't want or need the risk on my home.

If you want security, fix for 5 years. But don't beat yourself up about it when rates don't rise and you end up paying more. Security (usually) comes at a price.

amnblog

Waldorf_Statler wrote: »

Security (usually) comes at a price.

So Theresa May is telling us.

getmore4less

Longer term the fix can reduce security, because the higher rates means you owe more for longer.

Lower rate and overpay reduces the debt which is the ultimate security.

Those that need to fix because any short term rise would cause issues maybe sensible fixing as long as they have a plan for it not to be a problem at the end of the fix.

Those that don't have a plan are probably borrowing to much in the first place.

Much like those going into the various shared ownerships, if you can't afford a full house and won't come into money as lump sums or pay rises are getting themselves locked in to the shared trap.