5 or Seven Year Fix

NH2004

My current 5 year fix is coming to an end in a few months.
The current deal is 3.39% and I'll have about £135500 and 19 years remaining on the mortgage.

I have been offered a couple of options for another fix:

1.99% for a 5 year fix No fee.
or 1.99% for a 7 year fix. No fee.

I prefer the security of a fixed deal, and we have no plans to move from our current home.

With Brexit looming, it's made me think the 7 year option might be worth going for.


What are people's advice on the better option?

dimbo61

So both deals are exactly the same !
If you have No plans to move then the choice is yours.
Now you have paid 3.39% So £xxx amount each month for the last 5 years so why not set up the new deal for whatever term you want BUT set up an overpayment each month so you continue to pay the same mortgage payment you have made for the last 60 months.
Do not reduce the term just overpay every month

NH2004

Thanks dimbo61,

Yes both deals the same. just wondered if there was any downside to tying in for 7 years.

Yes, the sensible moneysaving thing to do would be to overpay to the same level as my current repayments, but we have some young children, so right now I'd like to keep the ~£1100 a year saved to put towards some nice family holidays!

dimbo61

Well you have been in your home for 5 years and have No plans what so ever to move the decision is still yours.
Kids get bigger, schools, room to extend ? Income, savings, spending and lifestyle all come into account.
We know very little about you or your family needs and wants

getmore4less

Rate is not a factor

Look at the others like ERC profile, overpayment limits portability.

Also check the fee based options £135k often hits better to pay fees for the reduced rate.

NH2004

It's 5 bedroom house, so we have no need to expand.
I know nothing is certain in life, but it is essentially our "forever home" and we are very happy there.

Hence the thinking that a longer fix might be the better option.

sal_III

NH2004 wrote: »

Yes both deals the same. just wondered if there was any downside to tying in for 7 years.

The obvious downside of 7 year fix is that it might be expensive to get out of the mortgage if you have to sell.
Although you might not have plans to move now, 7 years is a lot of time and there is plenty of unplanned events that might require you to sell.

That being said 1.99% for 7 years fix is a fantastic rate.