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2 or 5 year fix Undecided

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leew
leew Posts: 730 Forumite
Part of the Furniture 500 Posts Name Dropper Combo Breaker
edited 21 February 2023 at 7:26PM in Mortgages & endowments
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?

 
«1

Comments

  • MFWannabe
    MFWannabe Posts: 2,455 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    What’s the interest rates on both? 
    MFW 2025 #50: £1139.75/£6000

    12/06/25: Mortgage: £65,000.00
    07/03/25: Mortgage: £67,000.00
    18/01/25: Mortgage: £68,500.14
    27/12/24: Mortgage: £69,278.38 

    27/12/24: Debt: £0 🥳😁
    27/12/24: Savings: £12,000

    07/03/25: Savings: £16,500

  • leew
    leew Posts: 730 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    MFWannabe said:
    What’s the interest rates on both? 
    2yr 4.73%
    5yr 4.14%
  • We need a bit more information. Is there a fee for these mortgages? 
  • 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
    renegade1 Posts: 68 Forumite
    Fifth Anniversary 10 Posts
    edited 22 February 2023 at 10:32AM
    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
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    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
    tripled Posts: 2,882 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    edited 22 February 2023 at 10:39AM
    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
    leew Posts: 730 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    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
    Nailer99 Posts: 147 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    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_
    fergie_ Posts: 270 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    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?)
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