2yr or 3yr fixes rate?

Josh_Wilkin

Hi there,

As the uncertainty around brexit gathers, I wondered if anyone had any thoughts on fixed rates. We’re about to remortgage and currently think we’ll go for a 2yr fixed rate at a little under 2%. But someone mentioned to me today, why not look at a 3yr? Sure it’ll be a little higher interest than a 2yr, but perhaps the longer term stability makes it worth it, particularly with some sections of the media suggesting that house prices may fall and interest rates may go up.

The potential scenarios being I suppose (and perhaps this is scaremongering)

1) interest rates go up, and in another 2 years when we need to remortgage, the only fixed rates available are much higher.

2) house prices do take a tumble and in 2 years we’re nearing negative equity, and lenders refuse to mortgage us, thereby leaving us with an extremely high variable interest rate?

Any thoughts would be much appreciated!

Thanks!

getmore4less

Retention deals will still be around, no need to remortgage, pick your lender with the longer term in mind not just the current deal.

if you fear rates going up that much 2/3 years or even 5 makes little difference you need to be looking at 10y.

if you believe house prices are about to crash you should be selling or again looking at long term deals or trackers.

Peelerfart

Mortgage rates are as low now as they've ever been. If you wish for security,go for a long term fix as gm4l has suggested.

As for house price Armageddon, well it might happen but if your sitting behind your long term fix, you've bought plenty of time.

Should let you sleep at night as the country corrects itself into its new shiny world, or not.

butterflybook

Any of the above could happen - If you are worried about rate increases and house prices then look at longer term stability, the difference between 2/3/5 year fixed rates is not what is once was and it may be worth paying a little bit more to secure longer term stability