fixed for how long?

Doglover88

im after a fixed rate mortgage for when im due to renew in a couple of months, ive got 20 years remaining but am planning on taking it out over 15 years but am unsure of what term to go for? Am thinking 5 years fixed as im just coming out of the same, 5 yrs @ 4.75% (obviously i wont get one this good again).
A lad at work who has several properties he rents out, took out a fixed rate for 10 years about 8 months ago, think he got a great deal on it too

Any suggestions or recommendations?

supersavershal

I took a fixed rate out in April with Abbey it was 5.9% for 10yrs.It suits me as I know what il be paying for next ten years and I have a loan running for 10yrs so no nasty suprises.Before that I had a flexible mortgage but I was a bit nervous of things changing and being landed with a big rate increase.

cm233lh

Why a fixed rate? That will protect you from increases in the rate, but you won't benefit if it goes down. If you really couldn't afford any increase in repayments then definitely go for fixed, but remember that you could be faced with a big step change when it ends. If you really want predictability there are a few lenders out there who can offer 25 years fixed. Also a few offering capped rates so you can benefit from rate falls but be protected from rises.

Redbedhead

I would fix for a shorter term - maybe 2 years as I think (and it is only personal opinion obviously as no one has a crystal ball!) that rates may have fallen slightly in 2 years time so some better offers may be available.

sammyjammy

Glenbag,

How big is your mortgage? If its smaller it makes more sense to fix it over a longer term due to the fees everyone charges these days, the important thing to remember with a long term fix is the changes that will happen in your life in that ten years and the effect a 10yr fix will have on them, also is the mortgage portable unless you want/need to move house.

If you feel comfortable with it and need the assurity of knowing what your payments are then go for it. Just try and imagine what you will feel like if you pay over the odds for those ten years, will it bother you? Then again you could have a fantastic deal, my friends fixed for ten years last September on something like 4.5% what a winner! Speaking of winners what if you came into some money and wanted to repay the mortgage, would you have big fees?

Good luck.

Sam

mlz1413

Hi Glenbat,

I fixed for 25 years at 5.55% earlier this year with Kent Reliance Building Society.

Rate is now upto 5.98% but arrangement fees are low compared to many lenders now and I decided that this gives me security, if rates go up or down I am paying the same, if I can afford more in the future I can over pay.

There is a redemption fee of 3% so if your not prepared to leave a nominal value on the mortgage in later years then have a look at the 5 and 10 year fixed rates they offer.

Doglover88

sammyjammy wrote: »

Glenbat,

How big is your mortgage? If its smaller it makes more sense to fix it over a longer term due to the fees everyone charges these days, the important thing to remember with a long term fix is the changes that will happen in your life in that ten years and the effect a 10yr fix will have on them, also is the mortgage portable unless you want/need to move house.

Sam

Thanks everyone

Sam I will owe 100k when it come to renew, I will definately be in the same house for the next 5 or 6 years, so was thinking maybe fixed or capped for 5 years? I know I wont get as good a deal as Im on at present 5yrs @ 4.75% but any recommendations to a decent capped or fixed 5 yr deal? I'd like one I can make overpayments on with no fee, my current lender Bristol&West said theres a 5% fee for any overpayments when I phoned up to pay 5k off they said it'd cost £250!!:mad:

sammyjammy

Hi Glenbat,

Britannia BS have a nice 5yr fix at 5.39% but the arrangement fee is a whopping £999, http://www.moneysupermarket.com/Mortgages/MortgageDetailsNew.asp?ID=268555

There never seems to be many capped mortgages about (probably because its a bit of a win win scenarion for borrowers!) but there is a 5yr cap at 6.49% with Skipton http://www.moneysupermarket.com/Mortgages/MortgageDetailsNew.asp?ID=268555 with a £599 fee, the ERC on the fixed rate is fairly huge but they are both portable which gives you a certain flexibility.

Sam