Mortgage ending soon | 2 or 5 year fixed dilemma

Davina_Hart

Looking for a bit of advise here. 

I currently have a mortgage with Barclays on a 2 year tracker rate, finishing end of April this year, with recent BoE base rate increase I will be on 1.35% interest rate from March. 

I've 57% LTV - with the two quick base rate increase from BoE, I am thinking to fix the mortgage rate, however not quite sure whether to fix for 2 years or 5 years. 

If I decide to stay on 2 year fixed then I will stick with Barclays on 1.44% intertest, but if I look for 5 year fixed then Barclays are offering 1.69% compared to 1.54% interest with Nationwide. I understand that would involve a new application with Nationwide, which isn't an issues as my partner and I have secured jobs with limited outgoings and no credit issues. 

My partner thinks 2 year fixed is good for now, but my thinking is that even if we drop the LTV to, let say, 50% in the next two years but it wouldn't make any different on interest rate offering as lowest possible fixed interest rates are offered to 60% or less LTV.

Any suggestions, thought or advise on whether to fix it for 2 or 5 years?

Many thanks 

PawelK

Hello. In my humble opinion, five might be better as I don't think rates going down in the next two years. However, when choosing between Barclays and nationwide remember that remortgaging to a new lender as oppose to product switch with your current one, extra fees may be applicable such as valuation, solicitors and application fees. This can make going for cheaper rate not worth it.

microcristallina

Just did mine went for 5 year fix. 2.19% product transfer with my existing lender Halifax. It's a bit higher because I have a charge registered (like help to buy but it was a council scheme). As PawelK said I don't think rates going down in the next two years. It's up to you but for me it's about the peace of mind of knowing my mortgage is affordable for the next 5 years.

Davina_Hart

PawelK said:

Hello. In my humble opinion, five might be better as I don't think rates going down in the next two years. However, when choosing between Barclays and nationwide remember that remortgaging to a new lender as oppose to product switch with your current one, extra fees may be applicable such as valuation, solicitors and application fees. This can make going for cheaper rate not worth it.

Yeah, just done a comparison and its not much difference on monthly payments. I will probably stay with Barclays over 5 years., trying to convince my partner  

There is no reward on interest for LTV lower than 60% so better fix for 5 years, not only save on setup fee of £999 (if fixed for two years, need to pay again after 2 years) but I think 5 year fixed mortgage will be higher in two years than what is on offer presently. 

Many thanks 

getmore4less

What's the amount borrowed it makes a difference when picking deals with without fees.

You can't use difference in payment to compare deals.

Make sure use are using Barclays reward rates not new business
4 Feb rate product sheet

5y fix £999 fee 1.39%