Two or five year fix

Cameron1590_2

Hello,

Just had an offer accepted on a new home. Mortgage adviser has recommend either:

HSBC 2 year fix at 1.89% reverting to 4.19% variable £549.85 and then £724.53

HSBC 5 year fix at 2.29% reverting to 4.19% £580.27 and then £712.25.

Both have fees of £1324 that will be added to the balance of the mortgage.

Property is £171k with mortgage or £150k.

Just wondering if a two or five year fix would be more appropriate? The broker has recommended HSBC due to my employment situation. I plan to stay at the property for at least five years and will of course remortgage at the end of the fixed deal due to the spike in monthly payments.

Thanks

getmore4less

What are the no fee options?

Cameron1590_2

getmore4less wrote: »

What are the no fee options?

I have just asked the question. :beer:

logie48

The tactic I went for at the start of my mortgage, was to stay on a 2 year fix until I could start coming down the LTV bands, where the rates would get better each time I looked to remortgage. Started off with an 80% LTV and aimed to have the equity down to 70% by the time my first remortgage came. Knocked off about 0.4% with that, and now I am looking for a 60% LTV at the moment, but may look for a 5 year given the fact the bands don't generally go below this mark, and brexit uncertainty.

Just depends on your own situation, and with everything regarding predicting the future; its a risk. Mines has worked out in the past 4 years, given the fact the base rates have generally been low and nothing has really rocked the boat till this point. Had I went for a 5 year fix at the start (which I did look at), i'd probably have still been paying a rate close to 1% more than what I'm looking at just now.

getmore4less

I get slightly different numbers for a 30y 1 month term with fees added.

£151324 1.89% £549.90
£151324 2.29% £580.40


Add fees make payment the same.
option amount rate payment owing(after 2y)
1 £151,324.00 1.89% £580.40 £142,963.98
2 £151,324.00 2.29% £580.40 £144,169.23

With 88% LTV now what rates could you get if it was better