Fixed term - how long 2 or 5 years?

katie4

Hi
We have been in our first home for nearly 5 years now and that means our 5 year fixed term is coming to an end


we are looking at staying with existing provider an djust doing a rate switch


can i ask what what is best a 2 year or a 5 year fixed?


thanks

getmore4less

Depends on information not provided which will be best for you.

Start with the mortgage details

somethingcorporate

Rates are so low and we have no intention of moving so we will be going for a ten year fixed when ours is next up for renewal.

As per the above from GM4L it depends on your personal circumtances and the details of the particular mortgage (ERC, porting, type of mortgage etc).

Lokolo

Things I think about

- How near to the next LTV bracket am I. If I am close then after a 2 year fix I could possibly get an even cheaper rate (if interest rates stay the same) with the lower LTV

- Am I happy to pay the fee every 2 years rather than 5. On a small mortgage a £999 arrangement fee could be quite costly, to do it every 2 years gives an expensive option

- Difference in rate between the 2 and 5 year. If we are talking 0.5% then the difference is negligible on a small mortgage. However if there is a 1.5%+ difference this would make a bigger impact on repayment amounts

- Am I looking to move in the next 5 years. If so, fixing would incur repayment (if unable to port) charges

katie4

Thanks everyone our house is valued at £85,000
we have £57,000 remaining on mortgage 20 years left now

chelseablue

Our 2 year fix is ending in March and we're going for 5 years this time as we wanted the security of long low fixed rate (especially with the Brexit uncertain times ahead)

But then we owe a lot more than you (£219,000)

Current rate is 1.49% and we're getting 1.79% for 5 years

dimbo61

Good news ? You only owe £57,000 so any deal with fees might be expensive.
Use " whatsthecost " to work out the best deal for your circumstances

juniordoc

Why not look at lenders who offer a 3 year fix for a compromise between the 2?

katie4

thanks
so over 15 years this is the cost


5 year - £368.38pm - 2.06%
2 year - £353.57pm - 1.49%


or over 20 years
5 year - £289.98 - 2.06%
2 year - £274.79 - 1.49%

sammyjammy

If you change the term you may be required to make a full application, best to leave it at 20 years and overpay.

I'd take the security of 5yr fix but that's just me and i don't plan on going anywhere.

katie4

sammyjammy wrote: »

If you change the term you may be required to make a full application, best to leave it at 20 years and overpay.

I'd take the security of 5yr fix but that's just me and i don't plan on going anywhere.

Thanks Sammy, I dont think we'd be in a position to be able to overpay however