New mortgage help please

jackjohns

We are moving home and need some suggestions on which way to go
We need a mortgage of £200k for a £320k home on a 20 year term

Option 1.
This will be a big step up so feel a long term fix will help with peace of mind not worrying that monthly payments will become too much in 5years time (if rates changes)
Example1
10 year fixed, no fees, 2.64% rate £1046 per month

Option 2
Take a shorter term approach either fixed or not and benefit from current lower rates, but with the worry we would struggle if rates increased or wouldn't be able to get a 10yr fixed at that rate when / if rates do go up.
Example
2 year fixed, £2087 fees £896 per month

I understand its impossible to see into the future but im just after peoples views or ideas if theres something i may have not thought of.

Thank you

Westminster

Besides the rate, you will need to consider the ERC on a 10 year fix.

Probably you will be liable for additional charging should you need to move house within the next 10 years if you go with option 1.

Thrugelmir

How do you intend funding the £2087 fee ?

jackjohns

Yes it seems a big fee for such a short term, we would probably have to add to mortgage. Although I'm sure there's other options without fee but then higher rate. I am feeling more drawn towards the 10yr fixed at the moment

Westminster - all being well we hope to stay in this home for the long term

getmore4less

your numbers look wrong

1. £200,000 2.64% 20y £1074pm
2. £202,087 0.626% 20y £896pm

£1043 is £8.6k short after 20 years
0.626 looks a very low ratw.

jackjohns

Yes sorry I'ive got it wrong. it should be

1. 1 yr fix £200,000 2.64% 20y £ 1074pm
2. 12 yr fix £ 200,000 0.99% 20y £918pm (not factored in product fee *but if i do then LTV goes above 65% losing the 0.99% rate deal)