2 year or 5 year - Buying a flat in London

spudgun00

I am buying a property in London. I'm a first time buyer and I am an IT contractor.

I definitely want to do a fixed term option but which one, it would be great to get some advice from experienced people out there!

Given the Brexit and Trump vote, I want to get opinions on whether to get a:

a) 2 year - 2.29% (c. £1700/month)
b) 5 year - 2.99 (c. £1900/month)

The different is about £4550 insurance for 2 years. That's peace of mind insurance.

Ultimately I want to get a good deal. Appreciate all your help!

Thanks,

always_sunny

have you tossed a coin for advice?

Surrey_EA

Who knows?!

What's your attitude to risk? Where do you think rates will be in 2 years time?

spadoosh

I always get interest rate predicitons wrong (though normally good with economic predictions.)

Infaltion is on the rise so interest rates should be increased. I thought they shouldve rose about 5 years ago and was wrong. Thought they shouldve rose 3 years ago when i got a 5 yr fix and they stuck low and then dropped.

I would say that interest rates are due to rise. Maybe not in the next two years (due to concerns over brexit) but certainly in the next 5.

Youre going to be very hard pushed to get a cheaper mortgage than right now.

The prudent thing to do in your situation is to stick with the lower interest rate and pay off as much as you can while you get that rate.

hazyjo

I've risked it with a 2 year for several years now. Everyone kept saying they were going to rise, but I've held out each time, mainly cos I never stay put for long. Thought I'd be in my last house for decades, but was there 2 years, and will only have been in my current one two years before moving on again...


If you're 100% staying put, not getting married, not divorcing(!), not relocating with your job... then think about 5 years. I've learnt over the last couple of decades that any long term plans I ever make go straight out the window.


Some mortgage products can be ported - although I divorced last time so mortgage was much less, and this time I'll be buying even cheaper so won't want to borrow as much. Usually you can only port the same or more.


Jx

Marvel1

I took a risk in 2007 when I first took on my mortgage with a rate 2 year tracker something above the BOE rate and was about 5.??%. Great success as rates starting dropping. Never changed my deal once ended, took a risk and ended up on the base rate 2% above BOE and well you know the current rates.

marksoton

spudgun00 wrote: »

Given the Brexit and Trump vote, I want to get opinions on whether to get a:

For the love of everything Can we forget both.

I don't buy a house based on how a blonde g0b5hite behaves or how things are going across the water..

Shakin_Steve

That 5 year at 2.99 looks good to me. We fixed for 5 back in April at 3.89.:(

Got to add: Ours is a fifteen year mortgage and we intend to have it paid in 10/11 years.