In the current situation, is it advisable to go 2 or 5 yr fixed mortgage

putopao

Hi,
FTB's here. We recently had our mortgage offer but we opted for 2yr fixed of 1.69%. Should we ask go for 5 yr fixed instead since mortgage rates are really low at the moment? Anyone here on the same boat with us, how much interest rate did you get? TY

jonnygee2

Personally I would fix for as long as possible. Interest rates have never been lower. I'd even consider going ten years, if that's possible and you are going to stay in this house for a long time.

putopao

Can we ask the MA to reapply for 5 yr instead since the mortgage offer has been finalised?

Windofchange

It's crystal ball time I guess. I can't see interest rates rocketing up in the next two years, but there will of course be those who do. We've opted for the 2 year fix to keep things as cheap as possible for the initial two years, and then depending on what the situation is with the economy I will look at 5 year or 10 year deals. We will have also dropped to a lower LTV in two years, so the 5 or 10 year deal will be cheaper than it would have been currently. If I'm right and interest rates don't budge in the next two years, then it will represent a fair saving as compared to if we had taken a longer term at a higher interest rate. Our rate was 1.90%, so you got a good deal I reckon. 

Vincentvango

Hey what was your LTV to get a mortgage rate that low?
Im ftb mine was 2.29 with 10% deposit

[Deleted User]

I felt that a 5 year fix was the sweet spot.

flyingv

I recently re-mortgaged and decided on a 5 year fix at 1.59% with NatWest.  Shortly after their rate dropped to 1.54% but it was too late for me to change it.

[Deleted User]

flyingv said:

I recently re-mortgaged and decided on a 5 year fix at 1.59% with NatWest.  Shortly after their rate dropped to 1.54% but it was too late for me to change it.

What was the difference in monthly repayments

ElephantBoy57

It will be interesting to see what effect the massive borrowing by Governments has on the interest rate. That and the worldwide recession, which is coming quite soon. I fixed for 10 years a  couple of years ago, it certainly takes out the uncertainty and risk.

steampowered

If you will fall into a lower LTV bracket after 2 years, you may be able to remortgage onto a lower rate. The rates go down a fair chunk as your LTV goes up.

Only fix for 5 years if you are fairly sure you won't want to move house in that timeframe. As you'll be stung with an early repayment charge if you do.

putopao

That will be our forever home I guess as we wont afford another one in London. So can I ask my MA to reapply for 5yr instead?