5 year fix or 2 year fix with slightly better rate?

Fuzion

The idea of not having to think about this stuff for 5 years is tempting though isn't it

AnotherJoe

Fuzion wrote: »

The idea of not having to think about this stuff for 5 years is tempting though isn't it

Not when the cost of not thinking about it for the additional 3 years is about £2,000, no :eek:

getmore4less

If rates start moving you will probably be thinking about it just as much whatever fix you take.

d70cw6

fix for 5 years at 1.99% like me instead, best of both worlds.

getmore4less

d70cw6 wrote: »

fix for 5 years at 1.99% like me instead, best of both worlds.

bet you not 90%LTV

Fuzion

Cheers all.

The reason for asking is this: The day before yesterday a seller got back to me re a house I had unsuccessfully offered on back in November.

Her buyer had dropped out and she was desperate for get a sale agreed, as she was buying a house and there were other offers than hers on the table. So yesterday the sale was agreed, and I instructed solicitors, and everything seems fine.

I have an AIP (as mentioned above), but I think as this thread shows, I probably need to get further advice, or at least have time to take stock, before agreeing to a mortgage. I'm speaking to another broker, a fee-free one, on Weds. I know the seller wants to see progress, and I want to do what I can for her as I'm so delighted to have been offered the house, but it's reasonable to take a little bit of time to get the best deal rather than accept what's on the table, isn't it?

amateur_house

I would think that as long as the vendor knows you will be able to get a mortgage and the sale won't fall through it shouldn't be a problem. It sounds like won't have a problem getting a mortgage, it's just a case of deciding on the best deal. I think it's sensible to consider the options and what is best for your circumstances.

I've got a 5 year fixed rate at 1.99% (HSBC & the maximum LTV for that deal is 60%). Even then some of the threads on here are making me reconsider whether to go for a 2 years fix at a lower rate. I guess it's only with hindsight we will know if we picked the best option.

AnotherJoe

As per this thread, a double whammy, paying more and an ERC !
https://forums.moneysavingexpert.com/discussion/5576442

Thrugelmir

Fuzion wrote: »

I have seen lower rates of around 2.29%, but it could be that the broker is aware that I'm unlikely to pass affordability/eligibility.

Then ask them if this is the case.

The differential of £15 a month for peace of mind appears to be a low price to pay. Still leaves you the potential ability to overpay by £135 a month for the next 5 years.

Don't overlook the costs of mortgaging to another a lender when the product term term ends either. There's a £1k incurred, possibly more if there are product fees involved.

5 years rates have in general already edged slightly upwards in the past few weeks. Days of rock bottom rates may well be numbered for a variety of reasons. None of which relate to the BOE base rate either.