How long to fix ?

nicenswift

Hi

Firstly I have to admit I have been very lazy and have put off changing my mortgage deal for many months if not years.

Finally getting round to it.

I am currently with Santander on a standard rate and have 17 years to go

I rang them today to see what fixed deals they have as I was sure I would be able to pay less.

Got offered two 2 year fixed deals

1.39% Rate with £999.00 fee My monthly payments would be £455.00 Adding fee to mortage
1.59% Rate with no fee My monthly payment would be £457.00

And one 3 year deal

2.09% rate with no fee and monthly payments of £476.00

Should I be looking to fix longer ?

Any advice would be great.

Many thanks

YHM

It really comes down to what is appropriate to you. Would you prefer short term stability and the chance to revisit the market frequently or are you well settled and just prefer the idea of the mortgage being tied up for a longer period of time.

More so, have you considered other lenders and maybe sitting down with a broker? They will do the legwork to find the best rate available to you and one that is aligned to your personal preferences

nicenswift

YHM wrote: »

It really comes down to what is appropriate to you. Would you prefer short term stability and the chance to revisit the market frequently or are you well settled and just prefer the idea of the mortgage being tied up for a longer period of time.

More so, have you considered other lenders and maybe sitting down with a broker? They will do the legwork to find the best rate available to you and one that is aligned to your personal preferences

Thanks for the reply.

I am certainly no expert in Mortgages and the way I see it is that the BOE interest rate is only going to go up thus making the chances of a better deal in 2 years very slim. so is it better to fix longer ?

YHM

If I had a quid for everytime I got asked that

All I can say is the majority of my recent business has been on 3 & 5 years fixed rates. However, the suitability of said fixed rate is purely down to your circumstances. A 5 year fixed could be suitable for one person, but not for another...

Spangled

What is your outstanding mortgage balance? (From your figures I'd estimate around £82k but would be good to know the exact figure.)

It's generally better to go for a free-fee deal if your outstanding mortgage balance is low (ie below around £150k) because a £1k fee would be a proportionately higher fee on a low balance over 2 years.

But would need your exact mortgage balance for one of the maths-inclined experts on here to fully crunch the numbers.

As YHM says, it's about circumstances as much as the rate. For example, a five-year fix will come with early repayment charges if you want to switch deals before it expires - do you plan to move in the next five years? How secure is your job? Planning to have multiple kids and might need a bigger house? Things to consider that a good broker will take into account...

Good luck!

amnblog

nicenswift wrote: »

Should I be looking to fix longer ?

Any advice would be great.

Many thanks

You should probably be looking at other Lenders.

nicenswift

Spangled wrote: »

What is your outstanding mortgage balance? (From your figures I'd estimate around £82k but would be good to know the exact figure.)

It's generally better to go for a free-fee deal if your outstanding mortgage balance is low (ie below around £150k) because a £1k fee would be a proportionately higher fee on a low balance over 2 years.

But would need your exact mortgage balance for one of the maths-inclined experts on here to fully crunch the numbers.

As YHM says, it's about circumstances as much as the rate. For example, a five-year fix will come with early repayment charges if you want to switch deals before it expires - do you plan to move in the next five years? How secure is your job? Planning to have multiple kids and might need a bigger house? Things to consider that a good broker will take into account...

Good luck!

Hi,

Outstanding balance is £82k
No plans to move in next 5 years
Job secure
No more kids planned. (2 is enough)

Cheers

YHM

Property value?

nicenswift

YHM wrote: »

Property value?

around 200k

YHM

You can get cheaper elsewhere.

You need to sit down with a broker for them to review the market for you

[Deleted User]

Of those two rates, over 2 years, you should pick 1.59% Rate with no fee. There's a £951 difference in its favour - not to mention the interest you'd be paying over the rest of the 15 years afterwards on that £999

Now, should you take the 3 year fix.. well, that's a gamble on how much you think rates might go up and how soon. There's a 0.5% difference

But.. consider that you could get a 5 year fix from First Direct for 1.74% (£725 fee). A broker can't usually access FD.. I just did it myself when we moved- it wasn't rocket science. Sigh, another year until I can remortgage. I'm stuck on a 5 year fix, where the rates dropped and the value of the house went up. At the moment i'm paying £200 a month MORE than I really should do. I just didn't fancy the £5k fee to remortgage.