Mortgage Renewal & Brexit!

tmi479

Our mortgage is due to be renewed in the next few months and given 'Article 50' is due to be trigged at the end of March we are keen to get a mortgage offer in place. The problem... my husband and I cannot agree on the length of fixed term to go for!

We currently had a fixed rate of 2.79%. We now have just over 20% equity in our property, which has opened up significantly better rates for us. A recent search showed a 2 year fixed rate of 1.34% compared to a 5 year fixed rate of 2.09%.

I am keen to take out the 2 year fixed rate to pay off some of our other debt quicker (it's not significant but enough). My husband prefers the 5 year fixed as with Brexit looming who knows what might happen!

My view is exactly that! I know interest rates won't get any better, but I am prepared to take the risk that the saving we would get now would be sufficient whatever Brexit brings. My husband has pointed out that our 2 year deal will end just as we exit the EU. We can comfortably afford to pay the 5 year fixed, but is this just playing it super safe?

The issue I guess is that no-one knows what Brexit will bring? My husband assumes the worst whereas I am more skeptical. Yes - I imagine interest rates to rise, but that significantly? Who knows!

Any advice to help us on our way?

Thrugelmir

Why has Brexit focused your attention? There's plenty of other economic news to consider. Consumer indebtedness, budget deficit, balance of trade deficit etc etc.

Do what's right for you and your personal circumstances. Base your decision on what you do know. Rather than speculate on the totally unknown.

AnotherJoe

Agree with TM, why focus on Brexit? What about Trump? Grexit from the Euro. Frexit if MLP wins, Chinese devaluation blah blah blah.

You worry about Brexit and raising of rates, but Brexit is more likely to keep rates down than raise them. There's always something, or indeed several something's that might raise them, and usually the one that changes things is something that's not even on the radar and comes out of left field. Brexit it most likely isn't.

Forget Brexit and do what works for you and your risk appetite.

dunstonh

Our mortgage is due to be renewed in the next few months and given 'Article 50' is due to be trigged at the end of March we are keen to get a mortgage offer in place.

What has brexit got to do with it?

A recent search showed a 2 year fixed rate of 1.34% compared to a 5 year fixed rate of 2.09%.

Fixed rates are about certainty of payment rather than actually getting the best possible rate. Do you would certainty for the short term or the longer term? The more nervous you are things, perhaps the longer rate is better.

My view is exactly that! I know interest rates won't get any better, but I am prepared to take the risk that the saving we would get now would be sufficient whatever Brexit brings.

In the scheme of things, Brexit is not going to make much difference to the average consumer. Its a sideshow of political issues (which is great as things havent been this interesting in politics since the 80s and early 90s). There are far bigger issues in the world that are likely to have a greater impact and even then, rates are not likely to be move much. There isnt far for them to go in one direction and there isnt enough current positively to see them go in the other.

Boredatwrork

Take a look at see if you can get into the next bracket at the end of the 2 years, even if your interest rates go up, the Next LTV may well counter this.

Personally, i'd do the 2 years, but thats me.

tmi479

Thanks for the messages. Definitely helped with our thinking, especially the point around not just focusing on Brexit! Best get renewing!