Help to Buy mortgage - Fixed 2yr or 5yr? Been stung?

nrps1

Hi all,

I have been advised by one broker that I should take a 5yr fixed rate as after the two years there are only 3 organisations that will offer a remortgage and their rates are understandably bad due to lack of competition. The other broker said that just simply was not true at all!

So my question, has anyone here had first hand experience of this please?

I've also found more information (a year old) online to suggest this may indeed be the case:

http://www.thisismoney.co.uk/money/mortgageshome/article-3038831/Help-Buy-borrowers-risk-missing-best-remortgage-deals.html

On the plus side, I've just had my credit check approved for the new property we want to purchase via the broker and the 2yr fixed rate deal, so I'd best get on and reserve the property!

kingstreet

Choose a lender with a record/history of offering its best deals to its existing borrowers, rather than new borrowers.

Then if you can't remortgage you will still be in the market for the best rates.

Choose a lender with one of the lowest SVRs in the market.

Then if for some reason the lender stops offering customer retention products you aren't going to be a mortgage prisoner with a lender with a high SVR.

Look at remortgage options with those lenders who offer the option with the the equity loan remaining in place.

If you go without the equity loan your mortgage rate at the outset would be worse and if you remortgage after two/three/five years it will still be worse if for no other reason than you would have been paying mortgage interest on the equity loan you never took (ie a bigger mortgage from day one!).

getmore4less

The key is(usually) for any mortgage the lenders that offer good follow on retention deal for your circumstances.

find one of those and you don't need to change lenders(re mortgage) when your promotion ends.



You need to understand your exit strategy when buying part of a house.

value going up does not work, you need pay rises and/or new capital.

If they are not in your future you are in a trap.

nrps1

kingstreet wrote: »

Choose a lender with a record/history of offering its best deals to its existing borrowers, rather than new borrowers.

Then if you can't remortgage you will still be in the market for the best rates.

Choose a lender with one of the lowest SVRs in the market.

Then if for some reason the lender stops offering customer retention products you aren't going to be a mortgage prisoner with a lender with a high SVR.

Look at remortgage options with those lenders who offer the option with the the equity loan remaining in place.

If you go without the equity loan your mortgage rate at the outset would be worse and if you remortgage after two/three/five years it will still be worse if for no other reason than you would have been paying mortgage interest on the equity loan you never took (ie a bigger mortgage from day one!).

Do you happen to know which lenders have this history? My initial AIP is with Santander.

kingstreet

You would need to research that yourself, or ask whoever is arranging your mortgage.

We are not permitted to provide leading information to those of whom we do not have detailed customer knowledge.