To fix - 2 years or 5?

swindiff

I know no-one has a crystal ball, just after opinions on what you would do and why

My 2 year fixed mortgage deal with Santander comes to an end in August and I can sign up to a new fixed deal now, the decision to make is whether to go for 2 or 5 years. We have no plans on moving in the near future.

The choices are;
Fix for another 2 years at 1.99%, monthly payment £453.44
Fix for 5 years at 2.39%, monthly payment of £475.79

Fixing for 5 years will cost an extra £268.20 / year in the 1st 2 years, who know after that whether it is costing me or saving me money :rotfl:

So what would you do? I know there has been talk of rates steadily rising slowly, and maybe even one this month?

https://www.ft.com/content/db189320-2dc8-11e8-a34a-7e7563b0b0f4

bengalknights

Personally i would take the longest fix possible but thats mainly so i can plan in advance

Lokolo

Depending on remortgage fees as well, it could be better to remortgage once in 5 years than twice (for example HSBC charge £999 remortgage fee, you would end up doing this 3 times if you got 2 year fixes compared to once for a 5 year)

swindiff

With the options I have listed there are no fees or affordability checks, it is just a case of switching to the new product.

Boredatwrork

Whats your LTV, as a general rule of thumb, I would fix for a shorter period until I hit the best rates (60/65%), obviously other factors may need to be taken into consideration.

In regards to the economic climate it's Crystal ball time, but look at the evidence,: Latest figures show 0.1 growth which goes against reasons for a rate hike, Carney always saying the increases will be gradual and Brexit around the corner. You could possibly squeeze another 2 years out of it.

davetrousers

swindiff wrote: »

Title should read 2 years or 5 but I cant seem to change it.

Click Edit then Go Advanced

Boredatwrork

The other option of course is if they have a tracker on a rate probably somewhere in between (that can be switched at any time with no ERCs--these are fairly common), you can sit on there and change to a fix at the first sniff of a rate rise.

swindiff

LTV is around 45%.

The best with no fees on the MSE comparison tool is 1.79% for 2 years or 1.94% for 5 years.
But this would require me to do a full mortgage applications and go through all the affordability checks, which for a pretty small monthly saving just seems like too much hassle. The best rates are also with First Direct and HSBC who I know from past experience have pretty strict lending criteria, which I may well not pass as I have a lot of Credit Card debt which I am stoozing at the moment.

swindiff

davetrousers wrote: »

Click Edit then Go Advanced

Cheers Dave

Boredatwrork

swindiff wrote: »

LTV is around 45%.

The best with no fees on the MSE comparison tool is 1.79% for 2 years or 1.94% for 5 years.
But this would require me to do a full mortgage applications and go through all the affordability checks, which for a pretty small monthly saving just seems like too much hassle. The best rates are also with First Direct and HSBC who I know from past experience have pretty strict lending criteria, which I may well not pass as I have a lot of Credit Card debt which I am stoozing at the moment.

Then I guess it really does come down to the crystal ball time, lots of people are in the same position. However me personally, as I said earlier with Brexit coming up 0.1 rise and Mark Carney always saying if there is a rise it will be gradual, I would be tempted again for the 2 year. Follow your Gut though I guess.