2 yr fix or 5 yr fix

getmore4less

if already at 85% you are in the region where the differences going to 80%/75% are much lower than coming down from 95%/90%

looking at nationwide on £227k/£193k 85ltv no fee 2.89 &1.94 paying £900pm you will save over £3500. end up with £178,600 with new LTV of between 75%&80%(maybe under 75% with some HPI) the rates only drop 0.1% under 80%LTV and 0.3% if get under 75%

elverson

Offset mortgage only works if you will have significant savings after you've paid the deposit and fees (assuming you're a FTB from your post).

http://www.barclays.co.uk/mortgages/offset-mortgage

Niv

note3 wrote: »

Very grateful for everyone's input. I didn't even know 10 yr fixes exist until it was mentioned here. We're sticking with 2 yr fix and overpaying up to what a 5 yr cost would be.

Though don't know what offset mortgage is so will Google.

Our LTV is 85% and mortgage is £193k so makes sense to try and reduce debt further whilst on low APR.

Thanks very much everyone

I have gone one step further. I have a 5 year fix and am paying what the SVR would be. I have assumed (terrible I know) that SVR should be worst case so if I can cover that I should be golden!

smem18

We had the same dilemma - 5 or 2 year fix on a new build flat. Its not about the cost of the mortgage per month for us, because we could easily afford both (its £300 less than our current rent!). After a lot of deliberation we decided on 5 year fix because we have a high 90% LTV and new build flats tend to depreciate in value at first, and we were scared about having problems remortgaging if the property value was to decrease.

At the end of the day, I think its about what gives you peace of mind. If it makes you happy that you are only locked in for 2 years and have some flexibility that's good. It makes us happy that we know exactly what we will be paying for the next 5 years and won't have the stress of remortgaging right away. In 5 years it should be around the perfect time for us to sell up and move to a bigger place (we will be 32 years old then). We're going to overpay the maximum amount too every year.

MrMortgages

It really depends on what 5 year fix you would be able to attain, some of them have been very competitive recently. As an aside, I would never recommend a 10 year fix!

blackste

Trickzyy wrote: »

A lot depends on your situation, if you have a high LTV, then a 2 year fixed might be a good option as in 2 years time your home will (hopefully) have appreciated, and your mortgage balanced reduced, meaning you could re-fix for a better interest rate at a lower LTV.

I have taken out a mortgage this week, and almost word for word, that is the advice i was given by my adviser. I went for 2 years based on solid advice, and my belief that the rates will be stable for at least 2 more years.

Best of luck

sevenhills

blackste wrote: »

I have taken out a mortgage this week, and almost word for word, that is the advice i was given by my adviser. I went for 2 years based on solid advice, and my belief that the rates will be stable for at least 2 more years.

Surely if rates will be stable 'for 2 years or more' a two year fix is pointless.

sevenhills

MrMortgages wrote: »

It really depends on what 5 year fix you would be able to attain, some of them have been very competitive recently. As an aside, I would never recommend a 10 year fix!

I will be getting a ten year fixed, Coventry 2.69%; I have also fixed my energy prices for two years.

hughjonesd

MrMortgages wrote: »

It really depends on what 5 year fix you would be able to attain, some of them have been very competitive recently. As an aside, I would never recommend a 10 year fix!

That is interesting. Could you explain your reasoning?

robatwork

MrMortgages wrote: »

It really depends on what 5 year fix you would be able to attain, some of them have been very competitive recently. As an aside, I would never recommend a 10 year fix!

You would if one came on the market at 1.8%