Should I fix for 2 years or 5 years?

lookstraightahead

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

efirox said:

HotPantsCruiser said:

efirox said:

Thanks all, we decided to with the 2 year option in the end as the rate is ending tonight.

The way the market is, it's about what we can buy, not what we want to buy unfortunately  

The payments will be what we're paying for rent so our lives won't really change, which is the good thing!

What happens if the payments rise after two years?

We're fine, unless the rate goes to 15% or higher, in which case it would get tough

That puts you way ahead of most of the population though, in a scenario like that the price of your property would collapse and you would be left with a large high interest rate debt?

And you would be still paying someone else's mortgage so your rent would go up as well.

Sure, but wages would likely be rising and you can choose to look for somewhere cheaper, you can`t choose to walk away from a high interest rate debt secured on a falling in value asset.

The vast majority of home owners wouldn't be affected by a drop in house prices.

I would think psychologically people have now gotten used to their houses being money trees, so will feel the shock, especially as it can take away the choice to sell as it potentially takes away a big deposit.

When people are banding around life changing sums of money in their heads because of luck with the market, they're not happy going backwards.

Choosing short term interest rates when they are so so low is something I wouldn't do. Longer the better for me at present.

HotPantsCruiser

https://www.msn.com/en-gb/money/other/mortgage-deals-some-lenders-hike-rates-by-as-much-as-05-25-in-a-week/ar-AAUhA70?ocid=uxbndlbing

Some chunky deposit numbers being discussed there, not sure the average person can produce that much for a deposit?

Slithery

Cherry-picking data again are we? That article also states...

The typical rate on a two-year fix with a 5 per cent deposit is currently 3.12 per cent. This is a substantial fall compared to six months ago (3.57 per cent) and is also lower than February 2020 (3.22 per cent).

getmore4less

HotPantsCruiser said:

https://www.msn.com/en-gb/money/other/mortgage-deals-some-lenders-hike-rates-by-as-much-as-05-25-in-a-week/ar-AAUhA70?ocid=uxbndlbing

Some chunky deposit numbers being discussed there, not sure the average person can produce that much for a deposit?

There are loads  in the 75% LTV and 60% LTV ranges try finding the numbers of new borrowing at the various levels of LTV to back up your claim.

 
You completely missed what they said about  the prime target of your scare tactics those poor FTB with the little deposits.

The only borrowers who are yet to see big rate hikes are those with small deposits; typically first-time buyers.

RelievedSheff

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

efirox said:

HotPantsCruiser said:

efirox said:

Thanks all, we decided to with the 2 year option in the end as the rate is ending tonight.

The way the market is, it's about what we can buy, not what we want to buy unfortunately  

The payments will be what we're paying for rent so our lives won't really change, which is the good thing!

What happens if the payments rise after two years?

We're fine, unless the rate goes to 15% or higher, in which case it would get tough

That puts you way ahead of most of the population though, in a scenario like that the price of your property would collapse and you would be left with a large high interest rate debt?

And you would be still paying someone else's mortgage so your rent would go up as well.

Sure, but wages would likely be rising and you can choose to look for somewhere cheaper, you can`t choose to walk away from a high interest rate debt secured on a falling in value asset.

The vast majority of home owners wouldn't be affected by a drop in house prices.

No, not unless they wanted to sell and had a particular price in mind, lots of people with mortgage debt would be affected for all sorts of reasons though.

I have mortgage debt. It is currently around 65% of the value of our home. Our interest rate is fixed for 5 years.

Please enlighten me how I will be affected.

HotPantsCruiser

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

efirox said:

HotPantsCruiser said:

efirox said:

Thanks all, we decided to with the 2 year option in the end as the rate is ending tonight.

The way the market is, it's about what we can buy, not what we want to buy unfortunately  

The payments will be what we're paying for rent so our lives won't really change, which is the good thing!

What happens if the payments rise after two years?

We're fine, unless the rate goes to 15% or higher, in which case it would get tough

That puts you way ahead of most of the population though, in a scenario like that the price of your property would collapse and you would be left with a large high interest rate debt?

And you would be still paying someone else's mortgage so your rent would go up as well.

Sure, but wages would likely be rising and you can choose to look for somewhere cheaper, you can`t choose to walk away from a high interest rate debt secured on a falling in value asset.

The vast majority of home owners wouldn't be affected by a drop in house prices.

No, not unless they wanted to sell and had a particular price in mind, lots of people with mortgage debt would be affected for all sorts of reasons though.

I have mortgage debt. It is currently around 65% of the value of our home. Our interest rate is fixed for 5 years.

Please enlighten me how I will be affected.

The thread is about the OP and their mortgage debt and how long they should fix for, the obvious problem is that with a two year fix in a rising rate environment they could face much higher monthly costs in future when the fix ends.

anotheruser

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

efirox said:

HotPantsCruiser said:

efirox said:

Thanks all, we decided to with the 2 year option in the end as the rate is ending tonight.

The way the market is, it's about what we can buy, not what we want to buy unfortunately  

The payments will be what we're paying for rent so our lives won't really change, which is the good thing!

What happens if the payments rise after two years?

We're fine, unless the rate goes to 15% or higher, in which case it would get tough

That puts you way ahead of most of the population though, in a scenario like that the price of your property would collapse and you would be left with a large high interest rate debt?

And you would be still paying someone else's mortgage so your rent would go up as well.

Sure, but wages would likely be rising and you can choose to look for somewhere cheaper, you can`t choose to walk away from a high interest rate debt secured on a falling in value asset.

The vast majority of home owners wouldn't be affected by a drop in house prices.

No, not unless they wanted to sell and had a particular price in mind, lots of people with mortgage debt would be affected for all sorts of reasons though.

I have mortgage debt. It is currently around 65% of the value of our home. Our interest rate is fixed for 5 years.

Please enlighten me how I will be affected.

The thread is about the OP and their mortgage debt and how long they should fix for, the obvious problem is that with a two year fix in a rising rate environment they could face much higher monthly costs in future when the fix ends.

But nobody really knows what will happen in 2 or 5 years...

HotPantsCruiser

anotheruser said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

efirox said:

HotPantsCruiser said:

efirox said:

Thanks all, we decided to with the 2 year option in the end as the rate is ending tonight.

The way the market is, it's about what we can buy, not what we want to buy unfortunately  

The payments will be what we're paying for rent so our lives won't really change, which is the good thing!

What happens if the payments rise after two years?

We're fine, unless the rate goes to 15% or higher, in which case it would get tough

That puts you way ahead of most of the population though, in a scenario like that the price of your property would collapse and you would be left with a large high interest rate debt?

And you would be still paying someone else's mortgage so your rent would go up as well.

Sure, but wages would likely be rising and you can choose to look for somewhere cheaper, you can`t choose to walk away from a high interest rate debt secured on a falling in value asset.

The vast majority of home owners wouldn't be affected by a drop in house prices.

No, not unless they wanted to sell and had a particular price in mind, lots of people with mortgage debt would be affected for all sorts of reasons though.

I have mortgage debt. It is currently around 65% of the value of our home. Our interest rate is fixed for 5 years.

Please enlighten me how I will be affected.

The thread is about the OP and their mortgage debt and how long they should fix for, the obvious problem is that with a two year fix in a rising rate environment they could face much higher monthly costs in future when the fix ends.

But nobody really knows what will happen in 2 or 5 years...

That`s right, so what should the OP do?

RelievedSheff

HotPantsCruiser said:

anotheruser said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

efirox said:

HotPantsCruiser said:

efirox said:

Thanks all, we decided to with the 2 year option in the end as the rate is ending tonight.

The way the market is, it's about what we can buy, not what we want to buy unfortunately  

The payments will be what we're paying for rent so our lives won't really change, which is the good thing!

What happens if the payments rise after two years?

We're fine, unless the rate goes to 15% or higher, in which case it would get tough

That puts you way ahead of most of the population though, in a scenario like that the price of your property would collapse and you would be left with a large high interest rate debt?

And you would be still paying someone else's mortgage so your rent would go up as well.

Sure, but wages would likely be rising and you can choose to look for somewhere cheaper, you can`t choose to walk away from a high interest rate debt secured on a falling in value asset.

The vast majority of home owners wouldn't be affected by a drop in house prices.

No, not unless they wanted to sell and had a particular price in mind, lots of people with mortgage debt would be affected for all sorts of reasons though.

I have mortgage debt. It is currently around 65% of the value of our home. Our interest rate is fixed for 5 years.

Please enlighten me how I will be affected.

The thread is about the OP and their mortgage debt and how long they should fix for, the obvious problem is that with a two year fix in a rising rate environment they could face much higher monthly costs in future when the fix ends.

But nobody really knows what will happen in 2 or 5 years...

That`s right, so what should the OP do?

Whatever they think is best for them and their situation. 

HotPantsCruiser

RelievedSheff said:

HotPantsCruiser said:

anotheruser said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

RelievedSheff said:

HotPantsCruiser said:

efirox said:

HotPantsCruiser said:

efirox said:

Thanks all, we decided to with the 2 year option in the end as the rate is ending tonight.

The way the market is, it's about what we can buy, not what we want to buy unfortunately  

The payments will be what we're paying for rent so our lives won't really change, which is the good thing!

What happens if the payments rise after two years?

We're fine, unless the rate goes to 15% or higher, in which case it would get tough

That puts you way ahead of most of the population though, in a scenario like that the price of your property would collapse and you would be left with a large high interest rate debt?

And you would be still paying someone else's mortgage so your rent would go up as well.

Sure, but wages would likely be rising and you can choose to look for somewhere cheaper, you can`t choose to walk away from a high interest rate debt secured on a falling in value asset.

The vast majority of home owners wouldn't be affected by a drop in house prices.

No, not unless they wanted to sell and had a particular price in mind, lots of people with mortgage debt would be affected for all sorts of reasons though.

I have mortgage debt. It is currently around 65% of the value of our home. Our interest rate is fixed for 5 years.

Please enlighten me how I will be affected.

The thread is about the OP and their mortgage debt and how long they should fix for, the obvious problem is that with a two year fix in a rising rate environment they could face much higher monthly costs in future when the fix ends.

But nobody really knows what will happen in 2 or 5 years...

That`s right, so what should the OP do?

Whatever they think is best for them and their situation. 

They don`t know, they have asked for advice on here.