2 year or 5 year fixed mortgage now?

mattf1968

Hi, I'm after some thoughts on a new remortgage please - should I go for a 2 or 5 year fixed repayment as things are now?

(due to accept an offer this week) Best wishes, thanks in advence 

MrFlibble1

Do you have a crystal ball handy? Very difficult to predict what's going to happen over the next 2-5 years.

At the moment, inflation is very high, which would suggest that interest rates are likely to go up, but the BoE is being careful to try to avoid a recession (which I suspect might be inevitable).

Nationwide currently have a 0.9% difference between 2 and 5-year fixes. Do you think rates are likely to go up 0.9% in two years?

Who knows what is going to happen?

What I can say is that I'm glad I went for a 5-year fix at the end of 2020 and I would probably do the same if my deal were ending now.

MrFlibble1

Also, if your mortgage is large enough to make it worth paying an arrangement fee rather than going fee-free, be sure to include that in your calculations. Paying £999 every 2 years be every 5 years can make a difference.

london21

Hard to predict but 5 years likely better considering not looking to move in the short term. 

raf300

I agree with above. 

If your not moving in long term, go for 5 year fixed. 

Also depending on how big your mortgage is, should you go for 2 year fix, and you are still in the same house, you will have to get a new deal again. 

Rates are likely to be  higher too in 2 years times. 

So, over the 5 year period it will be more expensive than going for the straight 5 year fix now. 

Don’t forget the fee to fix, so likely you pay that twice with two 2 year fix deals over the 5 years.