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2 or 5 year deal
Windlepoons
Posts: 56 Forumite
I know no one has a crystal ball, But what deal would you choose.
2 year fixed term 4.49%
5 year fixed term 3.99%
There's a £30 a month saving between the terms.
How likely is it for the rates to drop below 3.99% in the next few years?
Cheers
2 year fixed term 4.49%
5 year fixed term 3.99%
There's a £30 a month saving between the terms.
How likely is it for the rates to drop below 3.99% in the next few years?
Cheers
0
Comments
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My guess is that interest rates will drop below 3.99% within five years, but there is always a risk that they might go higher! However, having the cheapest deal is not always the necessary choice. If you want the stability of knowing that you can always afford your mortgage payments for the next five years, I would chose the 5 year option. My last fixed rate mortgage was fixed for 10 years, and I was happy to fix at quite a high rate because I knew I could afford the repayments (and the mortgage was due to end in 10 years plus a few months).The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.3
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5 year fix does not sound good at all. I guess rates will fall to less than 3.99 by the end of this year0
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Another thing to consider is if your LTV will change bands during the 2 year period, meaning more favourable rates even if the market stays the same.I'm not an early bird or a night owl; I’m some form of permanently exhausted pigeon.1
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We don't know the LTV bracket nor the repayment term that the OP is in so we certainly can't say with any certainty that they will be eligible for more favourable rates even if the markets do stay the same.ArbitraryRandom said:Another thing to consider is if your LTV will change bands during the 2 year period, meaning more favourable rates even if the market stays the same.0 -
To the OP it depends how risk adverse you are.
If you want the stability of knowing what your repayments are going to be longer term then the 5 years is the obvious choice.
When our remortgage is due in a few years time, if we can get anything under 4% fixed for the remaining term of 10 years then we will be taking it.0 -
I am surprised by the earlier poster suggesting mortgage rates would drop below 3.99% by the end of the year? We are already at 4.25% BOE rate and there may be one last rise yet. I am guessing that most banks are betting that over the course of 5 years rates might drop and that is why they are prepared to offer fixed terms below the BOE rate.
There is no sign that we are going to drop as low a 2% of less in terms of inflation rates this year so I would be fairly shocked if the BOE rate didn't do anything but flatten interest rates this year. Then after that, who knows? the Geopolitical picture still looks bleak. USA is politically fractured, China are sensing opportunities in Taiwan, Russia/Ukraine seems to be set for a long play out. Germany's growth is looking no more bouncy that our own.
I always go for 5 years because unless you are borrowing a fairly decent amount you end up having to fork out £1,000 each time you remortage so you have to factor that into whatever saving you achieve between 3 and 5 years.2 -
My LTV is 36%
I made the mistake of going 2 year fixed when the rates were 1.03% because I saved a few extra £ a month, if I had done the 5 year deal I would only be paying 2% for the next 3 years.
Just not sure what to do now I've been stung by the increase lol
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That would be why my post said 'consider' and 'if'... i.e. it's something that might be relevant to the choice.RelievedSheff said:
We don't know the LTV bracket nor the repayment term that the OP is in so we certainly can't say with any certainty that they will be eligible for more favourable rates even if the markets do stay the same.ArbitraryRandom said:Another thing to consider is if your LTV will change bands during the 2 year period, meaning more favourable rates even if the market stays the same.I'm not an early bird or a night owl; I’m some form of permanently exhausted pigeon.3 -
I would guess these offers will be more expensive by tomorrow given today's CPI and the complete incompetence of the MPC to deal with it.Windlepoons said:I know no one has a crystal ball, But what deal would you choose.
2 year fixed term 4.49%
5 year fixed term 3.99%
There's a £30 a month saving between the terms.
How likely is it for the rates to drop below 3.99% in the next few years?
CheersTo solve inequality and failing productivity, cap leverage allowed to be used in property transactions. This lowers the ROI on housing, reduces monetary demand for housing, reduces house prices bringing them more into line with wage growth as opposed to debt expansion.
Reduce stamp duty on new builds and increase stamp duty on pre-existing property.
No-one should have control of setting interest rates since it only adds to uncertainty. Let the markets price yields, credit and labour.0 -
Not necessarily, at least one more rate will be priced in already and they will be based on long term swap rates0
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