2yr, 3yr or 5yr

The_Bloodster

I am currently looking at re-mortgaging as my current rate runs out at the end of Oct. My consideration is how long do I fix this mortgage for. It seems my best rates without paying fees are


2yr - 1.83% (£300)
3yr - 1.99% (£304)
5yr - 2.13% (£307)


I suppose the gamble is will interest rates go up in the next two years. I think it could well be worth maybe the 3yr or 5yr as will a 0.25% rate change over next two years will probably mean I won't get the 1.83% again in 2 years?

Teamocil

You're asking people to look into a crystal ball, I think.

My inclination is fix for 5 years because I'm happy to pay a bit more to have the certainty that I've got an affordable mortgage for as long as possible, but it's down to your own feelings on that.

Tom99

I would go with 5 yrs at 2.13% it is still very cheap v past trends and then you can park that file for 5 yrs and not worry about it.

kingstreet

Why 'no fee' deals only?

A larger mortgage amount or longer fixed rate term may make a deal with a fee better value. Check out the outstanding balance at the end of the deal in each case to get the full picture.

The_Bloodster

Teamocil wrote: »

You're asking people to look into a crystal ball, I think.

My inclination is fix for 5 years because I'm happy to pay a bit more to have the certainty that I've got an affordable mortgage for as long as possible, but it's down to your own feelings on that.

Have you not got your crystal ball with you? lol


Yes I am swaying towards 5 years especially with all the Brexit uncertainty

The_Bloodster

kingstreet wrote: »

Why 'no fee' deals only?

A larger mortgage amount or longer fixed rate term may make a deal with a fee better value. Check out the outstanding balance at the end of the deal in each case to get the full picture.

My mortgage is only for £50,000 and to get the lower rates I have to pay fees up to £1700 which isn't saved by the lower rates of interest.


The best rate with fees is 1.35% but I will only save £10 a month with this rate meaning £240 over the period of the 2yr fixed rate.


I am looking at reducing my years and the rates on this are the same. Also I've not got the savings behind me to be paying lots of fees.

kingstreet

It's not just the monthly cost difference.

You need to look at the difference in the amount outstanding on each deal at the end of the fixed rate period.

£1,700 fee? Are you looking at remortgage products (new mortgage with new lender to repay existing mortgage) or just the customer retention products being offered by your existing lender?

foxy-stoat

Well rates are not going down at the moment - so for the extra 7 big ones I would fix for 5 years....assuming I was not planning on moving any time soon.

The_Bloodster

kingstreet wrote: »

It's not just the monthly cost difference.

You need to look at the difference in the amount outstanding on each deal at the end of the fixed rate period.

£1,700 fee? Are you looking at remortgage products (new mortgage with new lender to repay existing mortgage) or just the customer retention products being offered by your existing lender?

I'm looking at remortgaging as my current rate of 1.89% with HSBC runs out at the end of Oct.


The fees for example on my cheapest rate with Yorkshire BS is £1495 product fee and £175 valuation fee. HSBC are offering 1.44% but Application Fee £1499 and £30 other fees. Their monthly is £2 dearer so works out slightly less given cheaper fees over the initial 2 years after which I'd be looking to switch again

getmore4less

Rounding(to the nearest £) makes quite a big difference to the amount and term eg .could be
£47,200 15 years
£49,900 16 years
£52,500 17 years
£55,100 18 years

What you can do is work out break even with a 2y+2y/3y against the 5y and see how many rate rises the overpaying as if you were on a 5 protects you.

With the actual amount and full term I can do it later.
EDIT:
I see you have posted £50k thats going to be 16 years or very close.

The_Bloodster

getmore4less wrote: »

Rounding(to the nearest £) makes quite a big difference to the amount and term eg .could be
£47,200 15 years
£49,900 16 years
£52,500 17 years
£55,100 18 years

What you can do is work out break even with a 2y+2y/3y against the 5y and see how many rate rises the overpaying as if you were on a 5 protects you.

With the actual amount and full term I can do it later.
EDIT:
I see you have posted £50k thats going to be 16 years or very close.

Yes it would be a 16 year mortgage although I am considering reducing this to 14 or 15 years as my financial situation is much better than it was 2 years ago so can afford to pay more each month. According to my current provider the amount estimated to be outstanding when my rate ends is £49,990.63 so very close with your figures lol.