2 or 5 year fix?

dancing_star

Bit of a brain dump, any advice welcome.

5 year fix ending August 22 so looking around now for renewal. I owe just under £100k. Bought my house for £147.5k as a doer upper, spent £30k on it, no idea of today's value but £180k doesn't seem unreasonable (North East England).

Current provider Natwest 2.41%.

Natwest are offering 2 years @ 2.78% and 5 years @ 2.8%

Broker who supplied original mortgage has found 2 and 5 year fixes with Barclays at 2.67% and 2.7%

Online broker (Habito) has found Virgin 5 year fix @ 2.3% which has ERC of 3.5% of balance

I'm not fussed about product fees or cashback/incentives or anything like that. Luckily the difference in monthly repayments of £30 or so either way isn't going to be a huge factor in deciding which option to go for.

Background (sorry for essay)

I'm full time employed in a private sector professional service, and not looking to move. Job is as secure as can be reasonably considered; company owner is early 60s but unlikely to be major changes in the foreseeable future. Earn £37.5k with a small amount of self employed work say £300/month (main job are fine with this). I am single with no dependents and in early 40s and am not going to have any dependents in the future! I do have a partner of 1 year but due to their personal circumstances and previous marriage it would be extremely complex to combine our lives and I am not ready to have that conversation yet.

On paper it makes absolute sense to fix for 5 years, but part of me is thinking 'what if' re my partner and I, or my boss selling up (I'm in a semi rural area and not ideal for finding a new job quite as cushy as this one locally). The ERC would be eyewatering, up to £3.5k if I sold within a year.

Thoughts welcome, even if it's to tell me to get a grip and I'm being daft. TIA

london21

If you do not plan on moving in the next 5 years then I would do 5 years.

If you plan on selling say in less than 5 years then 2 years. 

K_S

dancing_star said:

Online broker (Habito) has found Virgin 5 year fix @ 2.3% which has ERC of 3.5% of balance

@dancing_star Just a quick comment - If you do opt for this and this is the product you're referring to - "75% LTV 5 Year Fixed Rate at 2.30% with £1,295 fee", then you need to be quick to secure it as it's being withdrawn today evening.

getmore4less

You should factor in the net fees and compare the fee no fee option from the same  lender and between lenders

eg. that 2.3% £1,295 fee against the Barclays 2.7% no fee 

2.3% saves ~£500 over 5y on a full term of 25 year even with the fee.

Thrugelmir

Given the current economic landscape . A five year fix at least provides peace of mind and gives you a figure to budget with. The days of low interest rates appear to be finally over. 

Sarah1Mitty2

I think low interest rates might come back, or have things really changed that much?

dancing_star

K_S said:

dancing_star said:

Online broker (Habito) has found Virgin 5 year fix @ 2.3% which has ERC of 3.5% of balance

@dancing_star Just a quick comment - If you do opt for this and this is the product you're referring to - "75% LTV 5 Year Fixed Rate at 2.30% with £1,295 fee", then you need to be quick to secure it as it's being withdrawn today evening.

Phew thank you for this tip off! We've just sent the application in after an afternoon of me madly uploading documents. Hopefully submitting application a whole hour before it is withdrawn will be sufficient. If not there's another option available at 2.38% which won't break the bank.

Many thanks again

K_S

dancing_star said:

K_S said:

dancing_star said:

Online broker (Habito) has found Virgin 5 year fix @ 2.3% which has ERC of 3.5% of balance

@dancing_star Just a quick comment - If you do opt for this and this is the product you're referring to - "75% LTV 5 Year Fixed Rate at 2.30% with £1,295 fee", then you need to be quick to secure it as it's being withdrawn today evening.

Phew thank you for this tip off! We've just sent the application in after an afternoon of me madly uploading documents. Hopefully submitting application a whole hour before it is withdrawn will be sufficient. If not there's another option available at 2.38% which won't break the bank.

Many thanks again

@dancing_star Well done, hope you get the rate!

dancing_star

K_S said:

dancing_star said:

K_S said:

dancing_star said:

Online broker (Habito) has found Virgin 5 year fix @ 2.3% which has ERC of 3.5% of balance

@dancing_star Just a quick comment - If you do opt for this and this is the product you're referring to - "75% LTV 5 Year Fixed Rate at 2.30% with £1,295 fee", then you need to be quick to secure it as it's being withdrawn today evening.

Phew thank you for this tip off! We've just sent the application in after an afternoon of me madly uploading documents. Hopefully submitting application a whole hour before it is withdrawn will be sufficient. If not there's another option available at 2.38% which won't break the bank.

Many thanks again

@dancing_star Well done, hope you get the rate!

Just an update, I did get the rate. Thank you very much K-S for alerting me to the deadline! I am very grateful.