First time buyer , first mortgage fixed mortgage advice

meat_n2_reg

Hello 
My daughter has just bought her first house , she is looking at mortgage offers at the moment 
I know you would need a crystal ball to see into the future so always a bit of luck involved 
However She is unsure to fix for 3 or 5 years 
No plans to move in 5 years ( hopefully) 
Would welcome any thoughts 
Regards 

snowqueen555

I'm guessing her offer was accepted? The house isn't bought until exchange of contract.

You're right, no-one has a crystal ball. It really depends on your daughter's risk appetite. Inflation is set to be higher than it is right now for the whole of 2023 and is predicted to start coming down to previous from 2024. That is just a prediction though, things change so fast that you can't really trust it. 

meat_n2_reg

Thanks offer accepted , but not exchanged as the house she is buying is still looking for a house , so could be a long chain or may be never happen ( hopefully not)
I do think house prices will drop , but my daughter does not want to wait , her money her choice 
My daughter can afford the 5 year fix payments if sale goes through and thinks that's its worth the peace of mind that gives for 5 years as rates are still at a low rate , I agree with my daughter 
My slight concern is its a given interest rates are going to rise in the short term , but no ideal what will happen 2024 onwards given the crazy state of things at the moment 

thomas1112

Nobody really knows what's going to happen and it's a personal risk appetite based decision.

We've just fixed for ten years as that worked well for our circumstances, but not for everyone!

One thing I would mention is check if the product is portable (most are these days). If she wants to then sell up and move in the fixed period she could do so without penalty/ERCs provided there would be no decrease in the loan amount (i.e. into a more expensive property).

macman

What matters is not the length of the fix, but the rate at which you fix.