10 year fix or 5?

dwsjarcmcd

I don't think I'd take any fixed rate in your circumstances.  I'd probably go onto SVR on your July end date until the February fix ends then look at the fixed rate options then and end up with one, single fixed rate, over whatever period you prefer.   

This saves you administration time and possibly money (one fee rather than two) with the caveat that no-one knows what will happen to fixed rates between July and February but I'd take the risk to simplify my mortgage. 

emming

Thanks all for your replies. I didn't get charged any fees by fixing in now, so I fixed the first part of the mortgage and am waiting to see what happens with the rates by the time I can fix the second part of the mortgage. I do value certainty when it comes to bills, so I was happy to fix for the longest period. I don't expect to be able to pay off the mortgage before the fixed rate ends, but if by some miracle I could, then I'll just invest the money or save it in a higher rate account and pay off the balance on the mortgage when it ends.

If rates improve, I can cancel the fix and get a new offer. Simplifying the mortgage by only having one rate (and going on a variable in the mean time till I can align the two) is not that attractive to me. I'd rather keep my options open and spread the risk and avoid going on the SVR of nearly 8%.  

lvm

emming said:

Thanks all for your replies. I didn't get charged any fees by fixing in now, so I fixed the first part of the mortgage and am waiting to see what happens with the rates by the time I can fix the second part of the mortgage. I do value certainty when it comes to bills, so I was happy to fix for the longest period. I don't expect to be able to pay off the mortgage before the fixed rate ends, but if by some miracle I could, then I'll just invest the money or save it in a higher rate account and pay off the balance on the mortgage when it ends.

If rates improve, I can cancel the fix and get a new offer. Simplifying the mortgage by only having one rate (and going on a variable in the mean time till I can align the two) is not that attractive to me. I'd rather keep my options open and spread the risk and avoid going on the SVR of nearly 8%.  

So you fixed for 10 years?

Just one thing I would have considered…would you have dropped LTV in 5 years which would’ve made you eligible for a better product then anyway? And if rates did increase, the drop in LTV would alleviate that somewhat. Eg if you’re with a 75/90% LTV product now but drop below 60% in 5 years the change could be significant.

emming

lvm said:

So you fixed for 10 years?

Just one thing I would have considered…would you have dropped LTV in 5 years which would’ve made you eligible for a better product then anyway? And if rates did increase, the drop in LTV would alleviate that somewhat. Eg if you’re with a 75/90% LTV product now but drop below 60% in 5 years the change could be significant.

Yes, for 10 years. My LTV is 45% so I don't think it makes much difference once you're under the 60% mark. 

Just_A_Dad

We remortgaged (yes  - this time last year) and managed to get a lifetime rate and we were in the under 60% LTW club. It was .2 of a percent higher than any 5-10 year fixes (it was an 18 year term btw) with the option to overpay. We were looking to add a bit each month, but now that interest rates are higher - it actually much better for us not t ooverpay and put that money into a compount interest account and/or ISA and save even more money to pay off down the line - whilst on the security of the knowledge that our monthly DD will never change.