What advice? 2yr or 5yr fixed...??

nomadhare

Hi all
I'm after some expert advice. I've got to renew my mortgage and can't decide whether to go for a 2 year or 5 years fixed. The rates are good for both, but I am worried about tying myself into 5 years in case life takes a turn and I want to buy (all my money is in my house) somewhere else. The risk of 2 year is that interest rates could rise and i'll end up with something much more pricey 2 years from now.

Which is the better risk to take? Is there likely to be a big rise in interest rates? What are the penalties for pulling out of a mortgage if I wanted to sell and free up my capital?
Thanks all
Toria

dimbo61

Without sitting down with a "Whole of market mortgage broker " who can do a complete fact find we would all be guessing !
Age, income, job and job security, kids, savings, pensions, other half, rates for the 2/5 year deals, LTV, equity, etc.
The BOE again held the base rate at 0.5% and it might stay that low for some time yet.
Are you planning or need to move in next 2/3/4/5 years ?
Property big enough ?
Kids planned ?
Either a lot more info or speak to a broker

amnblog

This question comes up every week.


Picking a fixed rate term is less about second guessing the future of the market, and more about your own needs and circumstances.


There is always a chance you will be safe on a fixed rate as underlying rates rise, or you may be stuck on a fixed rate as other more competitive rates become available.


Either way, if you can manage your mortgage you have made a good decision.


Therefore Dimbo's post above is correct.


Get some advice.

Paully232000

We chose a 5 year as we wanted certaintly of payments for a fixed period due to our particular circumstances. Job certainty, knowing we could afford the payments even if one/both didnt have a job, what we know is going to happen in our lives in 4 years etc etc

I guess nobody can answer your question without knowing your particular crcumstances, and even then possibly not.

nomadhare

Thanks guys. I realise it's so dependent on soooo many things! I've been living over seas in a remote place so feel really out of touch with the the financial forecasts and have to make this decision super quick. It will be my 5th mortgage so I'll probably just go 2 year again and keep up the unsettled/nomadic tendencies!
Cheers
T