Fixed mortgage about to end. From 1.79% to over 4%. 2 or 5 year fixed?

bflare

Hello. I finally managed to move into my first bought property last March & secured a 2-year fixed mortgage from Halifax via a broker at 1.79%. It is due to come to an end at the end of December 2023. It looks like I will struggle to get anything lower than 4% which is going to mean an extra £200 a month I will need to find. The better deals are for a 5-year fixed. I am guessing that it's just a case of sucking it up & most people are in a similar situation. What's the current opinion on the best-fixed term? 2 years or 5?

dimbo61

Crystal ball time 
You can with most lenders sign up to a new deal as an existing customer 3/6 months before your old deal ends.
Check the lenders website.
Now consider will you want to stay in your new home long term 5+ years ?
Will your LTV be 75/60% in 5 years time ?
Are you likely  to need to move due to your job, bigger home, retirement or kids,  etc

bflare

dimbo61 said:

Crystal ball time 
You can with most lenders sign up to a new deal as an existing customer 3/6 months before your old deal ends.
Check the lenders website.
Now consider will you want to stay in your new home long term 5+ years ?
Will your LTV be 75/60% in 5 years time ?
Are you likely  to need to move due to your job, bigger home, retirement or kids,  etc

Thanks for your reply. In answer to your questions:

Now consider will you want to stay in your new home long term 5+ years ? - Yes
Will your LTV be 75/60% in 5 years time ? - I have no idea how to work this out.
Are you likely  to need to move due to your job, bigger home, retirement or kids,  etc - No

fergie_

bflare said:

Will your LTV be 75/60% in 5 years time ? - I have no idea how to work this out.

Look at how much your property is worth and how much the mortgage is for. If the mortgage was 70k and the value 100k then its 70% LTV.

The rates tend to be best at 60% or less, but there is a large drop at 80%. So it is a case of using the calculators here to work out how much of the capital you will pay back during the deal and then being realistic about the house valuation when the deal is up. Need a crystal ball though for that...

amnblog

Will your LTV be 75/60% in 5 years time ? - I have no idea how to work this out.

Looks like a question for your Broker, but you work out loan to value like this: Divide mortgage balance by property value and multiply by 100 B/V X 100 = LTV Halifax offer rates for loan to values to 60%, 75% and 85% If LTV is just above 60% or just above 75% you need to bear in mind that in two years time you may be under 60% or 75% and eligible for a lower rate.

FashionHeart

bflare said:

Hello. I finally managed to move into my first bought property last March & secured a 2-year fixed mortgage from Halifax via a broker at 1.79%. It is due to come to an end at the end of December 2023. It looks like I will struggle to get anything lower than 4% which is going to mean an extra £200 a month I will need to find. The better deals are for a 5-year fixed. I am guessing that it's just a case of sucking it up & most people are in a similar situation. What's the current opinion on the best-fixed term? 2 years or 5?

Yes everyone is in the same situation.
Mine's coming to an end on 31st August 2023, but luckily I've managed to find 3.89% from my current lender (HSBC) for 5 years FR.
The days of getting below 2% mortgage rates are over, unfortunately.