Fix length

omelette451

A call-out for advice from the experts - amateur and otherwise - on this board...

I'm on a (good) tracker but the best fix rates are a bit lower than I pay now, so a no brainer really (I'm with NW so can 'switch and fix' without charge or hassle, and tracker rates can't really fall much lower than they are). However, what I'm struggling with is whether it's better to pay a slightly higher rate for a longer fix than 2 years. When/why would you do this? I get for some people certainty is worth a price but I don't struggle with payments (in fact currently overpay £70 each month). When else? What's the limit on acceptable rate diffrence? Is 2.24% worth a 5-year fix when a 2-year is 1.64? What about 3-year at 1.94%? I think there's some logic I'm missing so any pointers would be most welcome.

NW put up the best 5-year rates this week so I'm thinking that moving quickly isn't a bad idea.

Father_Christmas

Similar situation. 2yr 1.54 or 5yr 1.94. Only £16 difference a month mind

ThePants999

Nobody can answer this. You have to guess what you think interest rates will do, or look at how your circumstances are going to change. We opted for a 5-year fix, for example, not because we thought we'd save money over the 5 years but because we needed the certainty for that period of time.

A tracker that charges more than a fixed rate is not a particularly "good" tracker, surely...!

getmore4less

What's the tracker is there a better one.

Once given up they may not be available again.

Are both the 2&5y rates cheaper than the current/best tracker.

omelette451

ThePants999 wrote: »

A tracker that charges more than a fixed rate is not a particularly "good" tracker, surely...!

Good point. What I meant was that while the tracker was a great deal when I took it out, it has now been beaten by fix rates that have fallen in the meantime, hence trying to decide what's best as I know I need to switch to something.

My options are
1.64 - 2Y fix
1.74 - current tracker
1.94 - 3Y fix
2.24 - 5Y fix

I know it's an individual decision for everyone, and I'm not looking for anyone to tell me what to do. It's more just a call for advice of what to think about from those who have been here before me, maybe stuff that seems obvious but I might not have realised.

amnblog

It's less about the rate and more about how you feel about the rate.

We have clients keen to take 0.99% over 18 months and others keener to pay 2.79% for 10 years.

If you feel happier knowing where you are for five years then the five year fix may be a good idea. If you like to retain flexibility, perhaps you would be happier staying on the rate you are on rather than locking into a new one.