2 Yr, 5 Yr or 10 Yr fixed.

BrOz

Hello all, 

I'm just wondering how long you fixed your mortgage deal for and why?

2 years has the lowest interest but I'm worried a bout interest rates in the future, I'm really considering 10 years... 

What have you guys done? 

maximoose94

BrOz said:

Hello all, 

I'm just wondering how long you fixed your mortgage deal for and why?

2 years has the lowest interest but I'm worried a bout interest rates in the future, I'm really considering 10 years... 

What have you guys done? 

Horses for courses. Longer fix gives you security so that if interest rates change, you change employment etc then you haven't got to go back through affordability. 
First House we went 5 year fix. When it comes up we will be doing a 2 year fix as there is the potential of a move. I also can't see interest rates going anywhere. 

RelievedSheff

We are due to remortgage shortly and will be going for a 5 year fixed rate. 5 years gives you the security of knowing long term what your interest rate will be without being stuck with that mortgage for too long. A lot can change in 10 years and the property may not be suitable for you for all that length of time.

Interest rates won't be rising any time soon.

MovingForwards

I went for a 5 year fix, with a sub-prime lender.

I'm now saving for the ERCs as I'm hoping to remortgage in 2 years, but have the safety net of my current mortgage if I'm not able to move to a new lender.

I would take another 5 year fix when remortgaging due to wanting the security of fixed payments, budgeting and my overall plan for clearing the mortgage within 10 years of it starting. There's no risk of me moving within the next decade.

getmore4less

. Never fixed, took advantage of the great tracker rates available years back.
Base+0.95%
There were better we could have moved to but small savings on <£100k with borrowed offset funds at 0% on CC

Don't get fooled into thinking longer fixes are for the risk adverse.

Knowing you payment for years is oversold as a benefit. 

The risks are just different the main one being tied into higher payments. 

haras_n0sirrah

Questions I ask my clients - how long do you think it will be before you are likely to move? How likely are your circumstances to change and in what time scale?
Obviously no one knows the future but if someone is likely to move in 2-3 years then you wouldn't want to tie in for 5 as their lender may not allow them to port the mortgage due to criteria. If someone has a desire to start a family in the next 2 years then doing a longer term may be more appropriate as other wise when they come to remortgage they may be on mat leave or part time salary so it may not be affordable to change lender at that point. 
All down to peoples individual circumstances 

RelievedSheff

MovingForwards said:

I went for a 5 year fix, with a sub-prime lender.

I'm now saving for the ERCs as I'm hoping to remortgage in 2 years, but have the safety net of my current mortgage if I'm not able to move to a new lender.

I would take another 5 year fix when remortgaging due to wanting the security of fixed payments, budgeting and my overall plan for clearing the mortgage within 10 years of it starting. There's no risk of me moving within the next decade.

Our mortgage that will come to an end early next year is with Kensington. We only fixed that rate for two years as we knew that by the time the two years were over we should be able to move to a high street lender as my credit file will be greatly improved by that time. The rate we got was so high (5.19%) that we didn't even consider fixing the rate for any longer than two years even though we have no plans to move from this house for a long time, if at all.

MovingForwards

RelievedSheff said:

MovingForwards said:

I went for a 5 year fix, with a sub-prime lender.

I'm now saving for the ERCs as I'm hoping to remortgage in 2 years, but have the safety net of my current mortgage if I'm not able to move to a new lender.

I would take another 5 year fix when remortgaging due to wanting the security of fixed payments, budgeting and my overall plan for clearing the mortgage within 10 years of it starting. There's no risk of me moving within the next decade.

Our mortgage that will come to an end early next year is with Kensington. We only fixed that rate for two years as we knew that by the time the two years were over we should be able to move to a high street lender as my credit file will be greatly improved by that time. The rate we got was so high (5.19%) that we didn't even consider fixing the rate for any longer than two years even though we have no plans to move from this house for a long time, if at all.

Mine is 5.57%, my credit history will be 100% clear in 2024 and I picked a great flat with its own garden, fantastic views and did well with the budget I set.

It may / may not be my forever home as I would like to move further up and into the Highlands, have a house with about 3 acres for self-sufficiency.

For now I will keep saving, paying into my DB pension and other pension, making OPs and seeing where things are when the mortgage is paid off 13 years early.

KAP0365

We got a 5yr fixed from NatWest at 1.6%, we are due to complete on Friday. Our current mortgage is 3.7% and we are three years in to a 5 yr fixed so having to pay ERC.

New house we aren’t looking to move from for at least a decade, hopefully longer, but we will also make sure we have some cushioning should rates go up by the time our 5yr fixed comes to an end. It won’t stay this low forever. 

tweet86

We went for 5 year fixed. It’s a good length of time but can also pass really quickly. We were 4 years into a 5 year fixed when we moved house, but the exit fee was quite low so was the right choice for us. We’re hoping our finances may have changed in 5 years so we can reduce our term considerably 

fewcloudy

KAP0365 said:

 It won’t stay this low forever. 

That is true.
Although bear in mind that people have been saying that since 2008...
I guess eventually they will be able to say "I told you so!"