5 or 10 year fix - what would you do?

jamiewakeham

getmore4less wrote: »

It's only 3 rises if you are locked into the 10y fix
(even then it might be a bit less as it depends on the ERC)

with an ERC free exit at year 5 you only need to test the first 5 years and that is 1 rise.

Afraid I don't understand. If 2024 five-year fix rates were to be, say, 2.4% (two quarter point rises would probably do that) then on my 2.25% ten-year fix I'd end the ten years owing £86,915. I obviously wouldn't take the option to exit at five years.



If I'd take the five-year fix at 1.89%, followed by a further five-year fix at 2.4%, I'd be better off - I'd end up owing £85,121.


Only if we see three rises, to around 2.7% (ish), does the ten-year fix win over the two five-year fixes.



Or have I got something wrong?

getmore4less

Yep I am wrong with that later post

As you get to Y5 with a lower debt you still have that as a safety net for rises.

All that happens is the rises reduces the potential savings that could have been made.

jamiewakeham

Understood - cheers!


Just got off the phone with the advisor, who's approved everything. In case anyone is reading this thread and thinking of a long term fix, it's worth saying that the Coventry will allow you to reserve this rate up to six months in advance! So if (like me) you are pessimistic about what rate are going to do post March 29th, you can get this deal locked in now for anything up to mid July.

mickym

Im interested in this Coventry deal now too. My circumstances are here: https://forums.moneysavingexpert.com/discussion/5962199/advice-for-first-time-remortgage-on-a-10-year-fix-do-i-end-early-for-cheaper-mortgage