2yr vs 5yr fixed mortgage 70% LTV

strawberries1

Mortgage_Mark wrote: »

If you go for the 2yr fix and overpay the additional £155 a month, you'd have reduced the balance by about £5,500 more in those first 22 months, compared to paying that payment per month on the 5yr rate, meaning your LTV will almost certainly be in the lower banding for a potential remortgage/product switch at the end of that fixed rate.

I can't answer for you as I don't know how much you would value of the added security after 2yrs, but I'd be fixing for 2yrs personally.

Mortgage_Mark will your answer be the same if one was considering going self employed or having a child within the first 2yrs?

strawberries1

getmore4less wrote: »

£275k over 30years paying
1. 2y 1.69%(£975)
2. 5y 2.79%(£1129)

pay £1130 on both after 2 years you owe

1. £256884
2. £262905

£6021 difference

to be at the same place in 5 years(£243450) the 2 year followon for 3 years needs to be 3.62% or less.

You are looking at rates going up by 1.75%-2%(ish) in the next 2 years to make the 5 year a better bet.

Would you be so kind to calculate this for £190,000 over 25yrs.
2yr 1.74 and 5yr 2.14? I've tried using this but my figures are different and I don't get the same figures as yours when I use the OPs figures too.

Thank you.

[Deleted User]

Usually I opt for two year deals but six months ago I opted for a five year fix. Compared to a the two year fix the difference was a ~£10pm. My LTV is less than 30% and with endless referendums and brexit... stability was sought. I pay the max OPs allowed and by the end of the five years the mortgage should be at a level where I no longer care what the economy does

kingstreet

Please discontinue and post in strawberries own thread, here;-

https://forums.moneysavingexpert.com/discussion/comment/72280231#Comment_72280231

strawberries1

Dinosaur35 wrote: »

Hi everyone,

I would welcome your views on whether we should opt for a 2yr or 5yr fixed based on the current views of the market. I've given a brief overview below:

We are upsizing from 1 bed to 4 bed house with a LTV of 70%. We've recieved a mortgage offer on a 2yr fixed at 1.69%, this would actually be 22 months due to a delayed completion and product expire of May 2017. Our lender has advised that we can switch product before exchange and there is a 5yr fixed available at 2.79% with exactly the same arrangement fees, but for first 2 years would be an extra £155 per month or £3,400 over the 22 month term we would have the 2yr fixed product for. I know mortgages are about the long term view and we have no intention of moving again anytime soon, but £155 a month difference seems like a lot to pay out over the next 2yrs for 5yr peace of mind.

I fully appreciate that no one has a crystal ball and rates are only likely to go one way, but there are mixed views on whether we will see any significant changes in 2 yrs time. Based on some rough calculations of the loan value after two years and having to pay again to remortgage, i've calculated that if we stick with the 2yr fix we would be £2,200 better off in 2 yrs even if rates increased to 3.5% and at 4% would be approximately £360 worse off compared to the 5yr product over 5 years.

Any advice would be appreciated.

Is there a spreadsheet of website to make these calculations and comparisons pls?

kingstreet

strawberries1 wrote: »

Is there a spreadsheet of website to make these calculations and comparisons pls?

This person's last activity on MSE was on 01/04/2015 so you may be waiting a long time...!

strawberries1

kingstreet wrote: »

This person's last activity on MSE was on 01/04/2015 so you may be waiting a long time...!

Oh !!!!!!!

kingstreet

If you click on the user name, it offers a public profile option. Hit that and it shows the last activity date.