mortgage help

Neagle

Hello, im looking to remortgage in sept and the rates are looking good at the mo. The question is, do I go for a 2 yr fixed rate £737 per month or a 5yr fixed rate 2.29% £817.
I currently pay £866 so any drop is good. My situation is I have 2 small children and only work very part time (husband works full time) we also have a credit card to pay off (around 8000) in 2 yrs time this would be mush easier to pay off if our monthly mortgage payments were as low as possible.
We also may consider having no.3. we would like to extend the house but this wont be happening for a few years. Im not sure whether to go for the long term security of the 5 yr mortgage or enjoy the slightly less tight wallet whilst the kids are small for the next 2 yrs and get the credit card paid off (it is interest free until march 2016) any advice most welcome
Thanks

Maybe_its_because

There are plenty more qualified people on here than me but here's what my immediate thoughts were.

You don't give the % rates for both 2 & 5 yr rates so its hard to do a cost comparison over the life of your mortgage.

Without a crystal ball - fixing for 2 or 5 years has to be a personal preference.

Do you have other means to pay the credit card? You need to find approx £350 per month to ensure its fully paid in time. The £129 saving in mortgage payment would go someway to paying this.

Its all good and well thinking longer term but if you need access to the funds in the short term then I'd stick with the 2 years. Especially if you're looking at more expense with another baby and an extension.

We've tended to have gone for 2 year fixes in the past as we could never picture our lives beyond the next 2 years.

Some people are more comfortable thinking longer term so may well give you different advice.

Whatever you decide, don't look back and reflect on what you should've done. Make your decision and stick with it. Prioritise getting the CC paid off and good luck.

MIB x

Neagle

Thanks for that reply. The rates are 1.45 for 2 yrs and 2.29 for 5 yrs

gavted

Neagle,
Glad to see your planning ahead, not leaving it until September like so many

As many will tell you, the 2yr or 5yr option is often down to personal preference. If you look at the figures don't forget to include the arrangement fees, even if you just multiply the 2yr deal by 2.5 to make it "equivalent" to the 5yr deal.

Also, it might be worth checking the CC situation. You said it needs paying in 2yrs, but give March 2016 as the date, thats 11 months! :eek:

Personally, I have always done 5yr deals, but at the end of the day, it comes down to preference and your budget. Good luck with your journey :beer: