2 or 5 year fix Undecided 21 February at 7:22PM edited 21 February at 7:26PM in Mortgages & endowments 13 replies 1.2K views

leew

Help needed!

We can't decide between the two! I think 2yr and the OH thinks 5yr.

Difference is about £20 a month extra, overall the mortgage will go up around £100 a month depending on which we opt for.

Both deals are with current lender who are offering the best deals in our position.

Which one?

 

MFWannabe

What’s the interest rates on both? 

leew

MFWannabe said:

What’s the interest rates on both? 

2yr 4.73%
5yr 4.14%

Nailer99

We need a bit more information. Is there a fee for these mortgages? 

RelievedSheff

I would personally opt for the 5 year fix but then I prefer knowing what my repayments are going to be longer term.

2 years fixes are just too short IMO. 

renegade1

interest rates are predicted to be lower in 2 years. How would you feel 2 years into your 5 year fix if interest rates drop to 2-3%?

dimbo61

Which one is up to you and your other half !
Do you plan on moving in 2 or 5 years time ?
What's your LTV now and what might it be in 2 or 5 years time ?
Will you be able or want to overpay each month of win the lottery/ inherit some money.
Consider life events ! Kids, childcare, Job and career !
If you can get your LTV from say 90% to 75% in 5 years and have no intention of moving within the next 5/10 years then the longer fix might be the deal for you

tripled

renegade1 said:

interest rates are predicted to be lower in 2 years. How would you feel 2 years into your 5 year fix if interest rates drop to 2-3%?

Same question could be asked the other way - how would you feel if the predictions were wrong and you hadn't fixed for five years, with interest rates at 5-6%?

leew

Nailer99 said:

We need a bit more information. Is there a fee for these mortgages? 

No.

Exactly! I suppose it could go either way although I've since read predictions are it will fall. 

renegade1 said:

interest rates are predicted to be lower in 2 years. How would you feel 2 years into your 5 year fix if interest rates drop to 2-3%

tripled said:

renegade1 said:

interest rates are predicted to be lower in 2 years. How would you feel 2 years into your 5 year fix if interest rates drop to 2-3%?

Same question could be asked the other way - how would you feel if the predictions were wrong and you hadn't fixed for five years, with interest rates at 5-6%

Nailer99

If there are no fees then one of the main advantages of the 5-year (not having to pay fees in the future) is lost. I’d go 2-year if I were you. 

fergie_

On the no fees point, have you compared the rates if you pay a fee? (and compared the cost for the fixed term with and without the fees?)