Mortgage Rates Crystal Ball..

csgohan4

I think rates can only go up in the future, I will fix for 5 years when my deal ends next year

getmore4less

5 year deals give very short term protection from rate changes.

Good chance you commit to higher payments just in time for rates to go up.

 Fix is not always the low risk option when you do the risk analysis.

Michael_Bear

@getmore4less is bang on. The security payment is usually so high that by point they've moved by a material amount your on the next deal with 5 year fixed.

That being said we were quoted exactly the same rate for 5 year as 2 year so have just remortgage at 5 year one.

On OP calcs I'd be torn but if I was certain I wouldn't move I'd take the 5 years.

IAMIAM

I always find it odd that people factor in moving house as a reason not to fix longer?
You can port, you can fix at 60% LTV and then take that rate onto a 80% LTV and the rate remains when really it should be much higher.
There is also a porting gap of 6 months (usually) where if you have to complete and rent then buy the next a little later, you get the same rate back and the ERC refunded....

Windofchange

I'm going to have exactly this decision in a few months time. I'm not sure what our house will be valued at, but I suspect we will be in to the 80% LTV bracket at worst, maybe 75% depending on what they come back with. The consideration I have in my mind is that I think in the short to medium term things aren't going to change too much with rates ether up or down. I am however anticipating in a 3 - 5 year time frame that they will have to head upwards as the pandemic disappears completely and businesses and the such start back up again. Therefore, I am a bit wary about a 5 year fix as that puts me into re-mortgaging right where I see rates heading up. 2 years fix now and then looking at 5, 7 or maybe even 10 years fix in 2023/24 fits with what my crystal ball is suggesting. 

I think for us it will largely depend on what sort of deals we have access to. If in the 80% LTV then it will likely give a noticeable difference between 2 and 5 years. If at 75%, that gap will be a lot tighter and might make me opt for the security, but then again based on the above, not sure. It's a lottery hey!?

clueless_but_curious

I take a contrary view to most.  I don't see how base rate can go any higher than 1% in the next 2-3 years.  Every nation in the world has borrowed (printed) excessively.  But I am no economist.  The spread between lending rates and base rate is still much higher than pre-pandemic - I see this coming down over the course of the year

Michael_Bear

@clueless_but_curious I agree with you on the spread front. My 5 year rate of 1.29 sounds good at first but it's 1.19 above base rate which historically isn't a good deal at all.

Getting_greyer

clueless_but_curious said:

I take a contrary view to most.  I don't see how base rate can go any higher than 1% in the next 2-3 years.  Every nation in the world has borrowed (printed) excessively.  But I am no economist.  The spread between lending rates and base rate is still much higher than pre-pandemic - I see this coming down over the course of the year

Yep. That's what I think.  

IAMIAM

With two year fixes, you are always 18 months away from securing another fix - so not long at all really.

daveaspy

I was looking at my NW mortgage rate last month which is due for renewal in a few months, the 5 yr fix offered was 1.24% and that has now dropped to 1.19% so somewhat surprisingly (to me ) rates have actually dropped over the last month - possibly to get in that top lenders table as somebody else suggested. I've not jumped yet but am tempted