How Long Should I Fix For ?

JOBEN

Hi Guys

I was hoping someone could advise me please. I am going to transfer my mortgage and fix it with First Direct

£65k mortgage on a £150k house - the rates are as follows

3 year - 2.69% @ £529 month
5 year - 3.19% @ £544 month
10 year - 3.48% @ £553 month

What are people's thoughts? - I was going to do 3 yr fix, 10 yr feels far too long! But thought would post here first :money:

P.s - I currently have nationwide base rate plus 2% on 85% of outstanding mortgage - but starting to think fixing would be good idea as rates are suppose to go up and the First Direct Rates are good.

Thanks in advance
Jo

R34GTT

So £2880 difference over 10 years without any fees.

How much are the fees? I'd say if you want to fix and won't be wanting to overpay more than whatever they allow then go for 10.

Fees often seem to run into the £1000s for each remortgage so the 10 may work out cheaper than 2 or 3 remortgages.

amnblog

These rates are nowhere near the best available on the market.

somethingcorporate

Agreed, why not look outside of FD?

JOBEN

Me again :j:j

I have just been looking at Nationwide deals - don't know why I didnt before !!!!!

I can get the following

4 yrs @2.44%
5 yrs @ 2.54%
10 yrs @ 2.94%

I have an early repayment fee on part of the mortgage @ £422 - I owe £10664 @ fixed rate of 2.89% fix runs out May 2017

Should I fix this and pay the early repayment fee or just fix the rest if the mortgage and keep this one for now.

Hope that makes sense
Regards Jo

amnblog

Paying 4% to switch a proportion of your loan two years early sounds expensive.

JOBEN

I know but that is the charge I signed up to with nationwide - do you think should keep this for now or just fix everything as rates are going to go up eventually and in May 2017 could be a lot more!

Thank you

amnblog

It will cost you £422 to find out if you were right.

samba

JOBEN wrote: »

rates are going to go up eventually

Not in the near future tho. The way things are it's unlikely to be this year now, and when they do move they will be small cautious steps with large gaps in between to gauge the effect.

JOBEN

Is that a risk you would take??

Just worked out from calculators on here that the overall early payment charge will cost £151 less if I factor in what I will save over the 5 years on the fix if the next 3 years were at the 3.99%

Hope that makes sense
Jo

getmore4less

If you stay with nationwide you should not need to move both bits.

You are trading a base rate tracker of +2% for the fees or new deal and/or higher follow on rate.

Overpaying by the fees and any increased payment will bring the mortgage down making any rate rises have less impact.

Also with such a small mortgage any fees will make switching in the future less viable.

on a 12 year term even the 5 year fix will have you down under £41k fees a big issue.