2 yr fix or 5 yr fix

amnblog

A low rate tracker that gives you a warm glow about getting a good deal will keep another borrower up all night with worry Phill.

Hence the reason for the range of products available on the market.

getmore4less

looking at nationwide £100k 50% LTV no fee these are the fixed rates on offer

1.49 2y
1.94 5y
2.99 10y

the rates required at the end of the 2y and 5y to be no worse off over the rest of the 10y paying £474 (approx 25y @ 2.99%)

2y 3.50%
5y 4.47%

serko

Are you including fees in that? At the end of the day everyone's circumstances are different. We're currently on an interest only tracker at 2.89% above the Base rate. We've been on that for 6 years in that time we've not had the opportunity to remortgage to a better deal due to family circumstances (two children, associated maternity leaves and I had to give up work). Now we're in a position where we can remortgage due to my wife changing jobs and getting a pay increase. We're choosing a 10 year fix offset mortgage at 2.75%. We intend to overpay as much as possible into the offset account as well as putting our emergency fund in there to offset the mortgage. Our LTV is around 40% so we are unlikely to get a lower rate based on that in the future. We believe we are in our forever home and have no plans to move however we might want to do some building work in about 5 years or so. We should be able to pay that from the money saved up in the offset account.
We believe this is the best mortgage for us. However I understand it is not for everyone.

As has been pointed out providers will only provide mortgages that are in demand so therefore there are customers for every type of mortgage provided. If there was one mortgage type that was most suitable to everyone then providers would only offer that mortgage.

getmore4less

The assumption is both will have similar initial fees and there will will still be no fee retention deals when you need a new deal.

for £100k the no fee versions are the best,
If your initial mortgage is big enough to make the fee versions better you need to look the change point and see if the fee/no fee is better for the switch

The key is that the paying as if you were on a higher rate on a lower rate gives you a bit of protection, if you don't do the calculations on what that may be you are are not assessing the situation properly

clairebeth

The other thing to consider is 'Will I get a mortgage in 2/5/10 years?'. If there is something possible in your future, perhaps children/maternity leave/career change/redundancy/retirement...will you manage to remortgage on two years if, for instance, have had children and one of you are on parental leave it a stay at home parent, or have reduced your working hours? If there are changes to your income/outgoings, it may be hard to secure a good rate or new lender, for instance, and be stuck in the standard variable.

getmore4less

currently, until it changes, retention deals are the fall back.

Jules778

I agree with ClaireBeth - getting a 5 year fixed can give you the flexibility in other areas of your life which a 2 year might not. Imagine you want to go freelance in your career for instance, if you have to remortgage in 8 months time its going to be a big consideration, whereas a 5 year will give you more flexibility to make changes. Obviously interest rates should be the biggest reason around your choice, but definitely something to consider as well

fewcloudy

phillw wrote: »

There may not even be 10 year fixes in 2 years time, we may not even have a functioning society.

Wait...what? :shocked:

robatwork

fewcloudy wrote: »

Wait...what? :shocked:

Probably speculation that the axis of trump/jong un/corbyn/putin would have tipped us into nuclear armageddon.

More likely in a 2/5/10 years things will be much the same with Wenger Out banners still flying over football grounds.