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Help required please, which is better?

edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
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langfordcloselangfordclose Forumite
9 Posts
edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
Hi. We are due to come out of our mortgage deal in a couple of months. They have said that we can remortgage within three months of the end date with no penalties. My question is which is better a 10 year fixed rate or a 5 year fixed rate which would give us a lower interest rate. (this way we could afford to reduce the term bu a couple of years and keep the monthly payment about the same as it is now). The debate in our house is that according to my husband he says if we do a short term we will come out of the deal right when the interest rates are really high again. Whereas if we do a longer term at least we know how much we are paying each month and by the time 10 years have elapsed the interst rates should hopefully have come back down again (something to do with recessions happening every 7 years, with 7 years to recover or something?) If anyone can help and give me some advise it would be greatly appreciated.

Replies

  • zx81zx81 Forumite
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    something to do with recessions happening every 7 years, with 7 years to recover or something?

    I'm afraid recessions often turn up expected, with no respect for diaries.

    You can't predict interest rates - you need to decide what level of certainty you want with your payments, as opposed to getting the lowest rate now.
  • newgirlynewgirly Forumite
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    Hi, I think it's really down to personal preference and nobody can accurately predict the future rate wise. I would also take into account your personal circumstances , for example will you defiantly not be moving in the next 10 years, a lot can change in that time?
    MFW 67

    2021 £5,829.42/£16,400
  • TropicallyTropically Forumite
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    It is strongly dependent on the different rates offered between 5 and 10 years. Is it 1% for 5 years, but 8% for 10 years? 5 years is also quite a long fixed rate.
    Mortgage started at £318,000 in June 2016. Original MF - 2041 :eek:
    2nd Property Mortgage at £275,000. Mortgage free: 2049 :eek:
    Total OPs: £29529
  • Hi thanks for the reply. I think from memory the 5 year was 1.99% and the 10 year is 2.99% with no fees or 1.79% for the 5 year and 2.79% for the ten with a £999 fee. This is with our current lender, we have not looked around to see what else is on offer yet as we have still been arguing over the time to fix for. I still think this is the best idea as at least it wont go up when the interest rates alter. Its just the length of the fix we cant agree on. Thanks in advance.
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