Mortgage rate decisions

System

Hi,

This is with Barclays. 1.78%, 2 year fixed, £999 upfront is the other product they offer.

System

Does anybody have other suggestions as to what mortgages out there are better?

Shared ownership - new build flat
Full price: £350,000
Our 75% share price: £262,500
Loan required: £223,125
LTV: 85%
Loan term: 22 years

A 5 year fix would be preferable. Whatever works out cheapest.

Thanks

getmore4less

£223,125 22y 2y fix

2.10% no fee or 1.78% £999 fee

£1056pm

the lower rate saves money over 2 years around £370.

synavm

I am at a loss with this myself.

We are hoping to purchase a £370,000 property using the HTB scheme. Circa 58% LTV for a mortgage in the region of £212,000.

We are stuck between a Halifax five-year fix at 2.2% through L&C or TSB two year fix at 1.68% direct.

To throw a spanner in the works, we have been turned down by Nationwide and NatWest at underwriter stage for overdraft usage (all authorised but living in it. We are paying it off on completion once my Father completes on his sale and gifts us our deposit, funds to clear debts).

Any advice would be really well received.

getmore4less

For the 5y fix

From Barclays 3 Aug sheet.

2.24% £999 fee you would be £500 better off after 5y over the no fee at 2.39%

In both cases you discounted the fee based option why?

jonnygee2

A 5 year fix would be preferable. Whatever works out cheapest.

Well, impossible to know without a crystal ball.

So, just think about the risks. With the two year fix, what's the rate? Then imagine the interest rates go up 1.5% in between now and then (probably about worse case), what will the repayments be? Will they be ruinous or affordable (albeit more expensive) to you?

By fixing for a shorter period, you are essentially accepting a bit more risk of paying more later but for the potential gain of paying less overall. Five year fix, less risk, less potential gain.

I fixed for five years recently. I was happier just to have the stability / less stress. I know I can afford it, I'm happy with it, and it doesn't seem worth the extra effort and risk for a small potential gain.

swindiff

I have just fixed my mortgage with Santander, it was a retention deal so no affordability checks or fee's. The options were 2 year fix at 1.99% or 5 years at 2.29%. The difference was £17 per month, for that small amount I considered it was worth the peace of mind so fixed for 5 years.