Remortgage due to rate ending in May - advice please

waltonmark

Morning all

back in Feb i prearranged a fix with nationwide which will start June 01st at 4.44%, reason being i wanted to guarantee that in case rates increased. I was told at the time i can reapply if rates drop (which they have). They are now offering the same 5 year fix at 3.99%.

My question is now should i fix for 5 years or actually fix for say 2 years given the chance rates could come down further?

All advice much appreciated.

MattMattMattUK

waltonmark said:

Morning all

back in Feb i prearranged a fix with nationwide which will start June 01st at 4.44%, reason being i wanted to guarantee that in case rates increased. I was told at the time i can reapply if rates drop (which they have). They are now offering the same 5 year fix at 3.99%.

My question is now should i fix for 5 years or actually fix for say 2 years given the chance rates could come down further?

All advice much appreciated.

Do you value certainty over risk? Current predictions are that interest rates will fall, potentially to around 1.5-2% over the next two years, but that is a prediction not a guarantee, they could stay the same, they could go up. Would you rather the certainty of knowing you will pay no more than 3.99% for the next five years, or would you rather pay slightly more now, taking a risk that whilst things might have significantly improved in two years time, they could also have got worse. 

london21

I think by next year rates might start to drop but if you want certainty maybe go for 5 years.

IAMIAM

Rates will not start to drop until this time next year AT THE EARLIEST. And even then, it maybe 5% to 4.75% then 4.5% by the end of NEXT SUMMER

LeroyBoyce

My mortgage expires in November, so I am looking ahead to having to change.

I currently pay c. £800. The best deal I can find for a repayment is c. £1300 - quite a jump.

I searched interest-only, and it's c. £600.

I figured, why not go for the I-O and then set up a standing order for the other £700. Then, if I have a difficult month, I do not have to pay it.

I do not plan to be in this house in 2 years time, and I also bought it very cheap, as it needed a lot of work (which I am doing myself), which has already added a fair bit of value to it.

It may be an extra tenner a month, but I think the benefits of flexibility of payments swing it.