Mortgage - 3 or 5 year fix?

victoria1991

Hello! I was hoping I could get some advice. We've first time buyers, who after multiple failed bidding wars have finally had an offer accepted.

We have received quotes for mortgages from our broker - one for a 3 year fix, another for a 5 year fix. The 5 year fix actually has a slightly lower interest rate (1.98% as opposed to 1.99% for the 3 year). Given what the Bank of England has said about expecting interest rates to rise, I know a 5 year fix seems more sensible financially, but our main concern was that 5 years is a long time - and though we're hoping to stay longer than that - if anything happened and we needed to move we were worried that we'd face charges. 

I've checked the detail of both mortgages and the 3 year fix is definitely portable, and the 5 year is but comes with a lot of conditions (e.g. have to borrow with the same lender, they may refuse on the property if it doesn't meet their requirements.) Does anyone have any experience of this situation that might be able to help with the decision? I don't really understand what the reality would be if we went with the 5 year fix and in 4 years time we had to leave and what that would mean, whereas it's easier to understand that if we go for the 3 years we're likely to face higher interest rates at the end when we go to renew. Would really welcome any advice!

getmore4less

Which lender(s)
What  LTV
amount
rates
full term
payment

Check the ERC profile of both offers some go down some don't.

They will have similar porting conditions,  has to be the same lender(that's what porting is) and similar restriction like suitable property and affordability at the time of port.