Fixed Length Advice with big Mortgage

bcfclee27

Our 2 year fixed deal is coming to an end in Dec this year.

We bought our dream house last year for £313,000 taking a mortgage out for £280,000 (we put down 10% deposit).
We got a very good deal on the house as bought from a friend who moved abroad.
At time of remortgage the house should have gone up in value a fair bit.

We took a 2 year fixed deal with Halifax at 4.79% and our monthly repayments are £1,380. A year into the mortgage i started over paying by £70 and have now upped this to £370.
The mortgage is over 35 years.
My wife and i are both 35 years old.

My wife and i both take home around £2k per month and have a one year old baby.

NOW the dilemma.....

To fix for 2 years, 5 years or 10 years....
I know this is a difficult question to answer as nobody knows what is going to happen. But i would just like to ask if you were in my position which term would you look to take of the 3 options.

Granted we have a massive mortgage but a long time to pay it and im a big believer in over paying.

I just cannot decide whether to fix long medium or short term and was looking for help on what others would do in this position.

Many thanks
Lee

amnblog

You need first to think about family and schools Lee.

If your world will stay as it is you can think about longer term rates.

If your loan to value is more than 75% you might not get sensible rates for longer term fixed.

bcfclee27

amnblog wrote: »

You need first to think about family and schools Lee.

If your world will stay as it is you can think about longer term rates.

If your loan to value is more than 75% you might not get sensible rates for longer term fixed.

My wife is a primary school teacher so will get our baby there eventually. We will be looking at baby number 2 in the next 12 moths i reckon.

LTV is almost certainly over 75%.

What would you call a sensible rate roughly for a long term fixed ?

With the above in mind would you look to just fix for the 2 years then in my case ?

Cheers

marc5180

With a mortgage the size that you have, any overpayment will have a massive effect on reducing the capital and term.

My advice would be to fix for 5 years and overpay as much as possible in that time.
5 years will fly by.

andyfromotley

Dream house, schools sorted, secure jobs? 10 years!! 3.44 with NW. (at 75%ltv) Get it fixed, and i predict at least 5 years of people looking at you enviously thinking how clever you were! (just try not to throw a divorce into the mix!!)

Amount of time spent worrying about your mortgage for the next 10 years- nil.

Rollinghills

We are buying our dream house and have a large mortgage, we went for 10 yr fixed at 2.89 but we have a 60% LTV so we managed to get a good rate I think. But it is a tricky decision in the current market when it is reasonable to expect rates to remain low in the next 2 years at least. I would not fix for 2 years I don't think because I don't see the point. Maybe 5 years. TSB have a 10y fixed with no early repayment charges after 5 years but I don't know the current rates.

Thrugelmir

Still a few months before you know what will be on offer. In the meantime keep over paying by as much as you able. As a debt of that size isn't going to reduce very quickly. Even in 10 years time it's going to be sizable and interest rates could be at any level.

bcfclee27

Thanks everyone for the advice.
Think I will keep overpaying as much as poss then see what deals I can get at the different fixed terms.
I will then probably return for advice with actual figures in my hand ��