Switching for a 10 years fixed rate? Not only for money

andyfromotley

obviously neither i nor anyone else knows what rates are going to do, but i have kept hearing how rates are 'definitely' on the up for years now! They have resolutely got lower and lower!!

Even if they go up do you think they are going to rocket up in the next 2/3 years?? I think you would be better off waiting. Also why are you looking at a 10 year fix if you are going to move in 5?

getmore4less

BBG2015 wrote: »

in 2 years you need a switch to a rate below 3.59% what are the 5 year rates like now will they go up to that?

So I should wait and switch then rather than now (if available, which is rather hypothetical)? Best 5y fixed now (no fee) is 2.49%

You think rates are going up MORE than 1% in the next two years

I don't.

I think we won't see a rise this year and maybe a bit next year.

Why do you want to fix anyway if you can afford not to in the long run it usually works out better.

getmore4less

BBG2015 wrote: »

I am after a 10y not 5y
I can repay £500/m without penalty

Ok going back to the model.

£115k @3.79% ERC £5700 2 years to go

10y fix 2.94% ( moving in 5y make this a new risk)

You don't say what full term but lets go with 20y

1. £115000 @ 3.79% £685pm £5700 in the bank
2. £115000 @ 2.94% £635pm

pay £635pm on both + £500pm overpayments on 1 till the money runs out.

After 2 years
2. £108748
1. £104697 still over £4000 ahead

I don't think you will even break even on the 10y fix, I think in 2 years you will find a deal that is low enough that that £4k lower debt means you stay ahead.

BBG2015

Thanks everyone. I think the general idea is 'wait' and see what happens. Really helpful

SandC

I think the thing is when I read your original post is that I would wonder if you had a 5 year fixed rate for your own peace of mind but are getting itchy feet after 3 years then surely a 10 year fix makes no sense at all, you would always be watching the interest rates and wondering .....

BBG2015

SandC wrote: »

I think the thing is when I read your original post is that I would wonder if you had a 5 year fixed rate for your own peace of mind but are getting itchy feet after 3 years then surely a 10 year fix makes no sense at all, you would always be watching the interest rates and wondering .....

Very true! This thread made me realise that now is not the good time and that the risk is high that I will end up kicking myself for making the wrong decision and spend over 5k which could have been used more wisely. Sadly, I rather enjoy watching interest rates and property market anyway so I guess I'll carry on doing this and if major changes occur I can still switch and fix then, if the 10 years fixed rate is still available. You see I come from a country where you get a fixed rate for the duration of your mortgage, 20, 25, 30 years and initial interest rates are much lower. People can plan their lives around their mortgage and almost forget about it.