Advice on a 2 years or 5 years fixed rate mortgage

maclovio

A bit late to the party, but I saw today 2yr Halifax with 90% LTV is now 1.64%

getmore4less

lamialex said:

Thanks for the replies

How much are you borrowing?

£494k deposit is £56k which includes fees of £999

Any plans to overpay?

no, we are planning to renovate the place

Is it the sort of property than might go up?

no idea, wish we would know... it's in north London

Is that a £494+£56 purchase?

Will redo the numbers

New rates were out yesterday

getmore4less

one thing to note these calcs are using 24/60months the real deals will be to a date which will change the results a bit.

also just notices I use 2.79% not 2.76% for the 5y

new rates look like  1.64% and 2.51%

95% also dropped 


on PC so might as well do it.

if its

£549(purchase) == £493(mortgage) + £1k(fee) + £56k(deposit) LTV 89.6%

that looks like on the old rates

rate	fees	payment	add fees
1.79%	£999.00	£2,039.57	£2,043.70
2.76%	£999.00	£2,276.79	£2,281.40

That's closer to £240 difference.

new rates

rate	fees	payment	add fees
1.64%	£999.00	£2,004.28	£2,008.34
2.51%	£999.00	£2,214.16	£2,218.65

£210 difference

just that last bit new rate needed with the new rate options

higher payment(£2,219)

Break even rate needed no fee and fee)		36
£456,359	3.181%	£418,287
£457,358	3.101%	£418,287

lower payment(£2009) (if you want to keep funds for renovation work)

Break even rate needed no fee and fee)		36
£461,479	3.171%	£431,697
£462,478	3.093%	£431,697

There is a bit of safety there and dropping to 80% or 75% should add some more.
.

ACG

I was on a seminar with a high street lender last week, they reckon rates will only go up by 1% over the next 5 years. 
So on that basis, I reckon I would do the 2 year deal. 

Throw the extra £200 a month at the mortgage.

getmore4less

ACG said:

I was on a seminar with a high street lender last week, they reckon rates will only go up by 1% over the next 5 years. 
So on that basis, I reckon I would do the 2 year deal. 

Throw the extra £200 a month at the mortgage.

Crashy referenced an article that went into 2023 saying 14% increase in costs for borrowers that's around 0.4%-0.5% in rate terms.

2 years smaller mortgage and some refurb should help LTV.

Those Halifax rates look pretty keen for new customers.

 what are they like on product transfers these days since they hid them?

FashionHeart

5 years is a better deal at the moment in my opinion unless you plan to move, such as myself.

getmore4less

FashionHeart said:

5 years is a better deal at the moment in my opinion unless you plan to move, such as myself.

What makes you think rates are going up by so much in 2 years?

Thrugelmir

ACG said:

I was on a seminar with a high street lender last week, they reckon rates will only go up by 1% over the next 5 years. 
So on that basis, I reckon I would do the 2 year deal. 

Can I borrow their crystal ball?  5 year forecasting is pretty impressive stuff. 

j.a.mcguire

1% is quite significant difference between the 2 and 5 year deals.  Id probably say locking in for 5 years would be sensible given that rates are going up, but 1% is too steep.  Id be looking for a better rate elsewhere on a 5 year deal.

getmore4less

j.a.mcguire said:

1% is quite significant difference between the 2 and 5 year deals.  Id probably say locking in for 5 years would be sensible given that rates are going up, but 1% is too steep.  Id be looking for a better rate elsewhere on a 5 year deal.

90% LTV 

for this size of mortgage the 5y options at platform might work
2.16% £1999 fee

Narrows the breakeven rate to ~2.5% from 3.1%