Confused - 2 or 3 year fix?

familyguy321

Hi,

I am due for my first remortgage in January and confused on whether to go for another 2 year fix or go a bit longer with Brexit in mind.

I took out a 2 year fix initially with the reasoning that if interest rates were to rise in the 2 years, they wouldn't reach the levels to justify paying the premium for a 5 year fix.

I am tempted to go with another 2 year fix, but with Article 50 due to be invoked in March 2017 there will most likely be uncertainty over the subsequent 2 years. Which is why I am thinking of a 3 year fix which would take me to through till January 2020.

What is the general consensus?

I should point out that I am only looking at fixes and my current LTV is 75%.

Regards,

FG

fru-girl

Nobody has a crystal ball this Brexit affair is really a big unknown at the moment. If you want rate security go for a 5-yr fix. Historically speaking, rates are low now. How much lower can they (will they) go? I'm thinking of moving in about 2-3 years, otherwise I'd go for a 5-yr fix myself...

getmore4less

Get the cheapest deal don't forget fees.

Rates are going nowhere fast.

lee111s

Have you considered a tracker?

I doubt rates are going anywhere soon. Trackers give flexibility which often allow you to remortgage at any point (they don't have ERC's) or switch and fix to a fixed rate product should you get worried or if rates begin to rise.

AnotherJoe

Are you expecting Brexit to put interest rates up????

Answer yes or no and show your workings.

familyguy321

fru-girl wrote: »

Nobody has a crystal ball this Brexit affair is really a big unknown at the moment. If you want rate security go for a 5-yr fix. Historically speaking, rates are low now. How much lower can they (will they) go? I'm thinking of moving in about 2-3 years, otherwise I'd go for a 5-yr fix myself...

Wish I had a crystal ball!!

5-year fix does not appeal to me due its length. I do prefer the security of a fix but it's comes with a premium and I can't see financial sense in paying that premium for 5 years.

Thanks for your advice.

FG

familyguy321

getmore4less wrote: »

Get the cheapest deal don't forget fees.

Rates are going nowhere fast.

Thanks. Good point about fees - I just realised I have a 'hidden' discharge fee of £155 to pay if I move away from my current lender. Daylight robbery!

FG

familyguy321

lee111s wrote: »

Have you considered a tracker?

I doubt rates are going anywhere soon. Trackers give flexibility which often allow you to remortgage at any point (they don't have ERC's) or switch and fix to a fixed rate product should you get worried or if rates begin to rise.

I've not really looked at a tracker. Fixed has always appealed to me because of security.

What are the drawbacks with the tracker vs a fix?

FG

familyguy321

AnotherJoe wrote: »

Are you expecting Brexit to put interest rates up????

Answer yes or no and show your workings.

Yes.
Increase in inflation + decrease in value of sterling = Increased interest rate

Look forward to seeing what mark I get

FG

getmore4less

A lower rate and over pay is another way to get security and that lasts for longer than any fix.

if you don't want to pay a premium(some would call it a penalty) along with the fee for a long time why pay them every few years?

dimbo61

Why not do your own homework or sit down with a mortgage advisor or the other half and look at your situation !
How long are you going to stay in the property ?
Can you afford a rate rise ?
Kids, job, pension, Income, long term plans ????
Savings, local market, deals from existing lender ?
Overpaying ! Offset, tracker,fixed, interest only or repayment