2 or 5-year fixed deal on remortgage?

At8

Anyone else in the same boat? Do you think rates will be better in 2 years or would it be better to have more security with the 5-year fix?

This is so difficult! Don't know what to do!!!!!!!! 

michaels

I normally go with 5 but this time will go with 2 (0.4% higher rate) hoping that 5 year will be cheaper in 2 years time although this is now looking less likely as it seems we have embedded inflation.

At8

Thank you michaels!! I might do the same too. I hope it will be better in 2 years' time!

Newbie_John

Same here, if nothing major happens in next 2 years then rates should improve, although I think they will be around 3%-3.5%, which is still better than current 5 year fixes.

We went with 2 years long.

At8

Thanks John, the LTV should hopefully be better in 2 years too

RelievedSheff

In your instance with a better LTV in 2 years you are probably better off going for the 2 year deal.

You need to bear in mind of course that no one knows what will happen to interest rates in the future and they could well be worse in 2 years time then they are right now.

At8

I keep thinking what the best decision might be. On the one hand I am worried if rates are higher after 2 years, in which case the 5-year fix will keep us more secure for longer. I am put off by the 5-year ERC though in case we want to move to a new home by then. The 2-year fix definitely offers more flexibility and the ERC cost is less terrifying.

My offers are

4.08% - 5 years fixed
4.49% - 2 years fixed

They both have a £999 product fee. 

adamL

At8 said:

I keep thinking what the best decision might be. On the one hand I am worried if rates are higher after 2 years, in which case the 5-year fix will keep us more secure for longer. I am put off by the 5-year ERC though in case we want to move to a new home by then. The 2-year fix definitely offers more flexibility and the ERC cost is less terrifying.

My offers are

4.08% - 5 years fixed
4.49% - 2 years fixed

They both have a £999 product fee. 

I've just accepted a 3.93% 5 year fix. Not sure what the 2 year offer was. It won't switch until 1st November so can re evaluate closer to the time, but a rate under 4% feels acceptable - could be higher or lower in 2 years time but I have my doubts it'll be significant either way.

At8

adamL said:

At8 said:

I keep thinking what the best decision might be. On the one hand I am worried if rates are higher after 2 years, in which case the 5-year fix will keep us more secure for longer. I am put off by the 5-year ERC though in case we want to move to a new home by then. The 2-year fix definitely offers more flexibility and the ERC cost is less terrifying.

My offers are

4.08% - 5 years fixed
4.49% - 2 years fixed

They both have a £999 product fee. 

I've just accepted a 3.93% 5 year fix. Not sure what the 2 year offer was. It won't switch until 1st November so can re evaluate closer to the time, but a rate under 4% feels acceptable - could be higher or lower in 2 years time but I have my doubts it'll be significant either way.

That's a good rate adam. Can I please ask what your ERC is?

RelievedSheff

At8 said:

I keep thinking what the best decision might be. On the one hand I am worried if rates are higher after 2 years, in which case the 5-year fix will keep us more secure for longer. I am put off by the 5-year ERC though in case we want to move to a new home by then. The 2-year fix definitely offers more flexibility and the ERC cost is less terrifying.

My offers are

4.08% - 5 years fixed
4.49% - 2 years fixed

They both have a £999 product fee. 

Is the product able to be ported if you decide to move house?

At8

RelievedSheff said:

At8 said:

I keep thinking what the best decision might be. On the one hand I am worried if rates are higher after 2 years, in which case the 5-year fix will keep us more secure for longer. I am put off by the 5-year ERC though in case we want to move to a new home by then. The 2-year fix definitely offers more flexibility and the ERC cost is less terrifying.

My offers are

4.08% - 5 years fixed
4.49% - 2 years fixed

They both have a £999 product fee. 

Is the product able to be ported if you decide to move house?

It can be ported, yes, but the idea of porting stresses me out having read a bit about it. Do most people normally port when they want to buy a new house or do they plan in advance to have a variable rate in place?