If you were remortgaging, which rate would you choose?

At8

There is £240,000 left to pay, 24 years left.
Please help me out as I need to make a decision. Thank you!

Newbie_John

2 year fixed - 4.49%

7 years doesn't make much sense here.

2 vs 5 really depends on your acceptance of risk, people voting for 2 years hope to get <4% in 2 years time, people voting for 5 years prefer the peace of mind and happy to accept the higher rate.

The difference in monthly payments is £53 in your case, going for 2 year deal you'll pay £636 more during the first 2 years - and then it depends what rate will you get in 2 year time? If below 3.6% then you'd be better off going for 2 years, if more than 3.6% then better to go with 5 years. But nobody knows, especially if you look at any predictions now and those from March this year they constantly change a lot.

Your mortgage is 24 years long, during that time you'll face this dilemma many more times.

simon_or

2 year fixed - 4.49%

Mainly depends on your risk appetite, how strong an opinion you have on future interest rates and how flexible your finances are to absorb an adverse outcome (eg you fix for 2 years and bank mortgage rates go up to 6%)

Secondary considerations may be how long you plan to stay in the property, any cash due to come in, what kind of overpayments you can make, current LTV, and so on.

michaels

At8 said:

There is £240,000 left to pay, 24 years left.
Please help me out as I need to make a decision. Thank you!

Are those rates still available?

IAMIAM

2 year fixed - 4.49%

The problem is 5 year will be well into a new government and I believe the next GE will impact on things a lot over 2/3 years and thus your 5 year fix will be well into a new administration. 

At8

Thank you all for taking the time to help me! 

Initially, I was thinking of going for the 2 year fix. With the recent developments though, I think the 5 year's 4.08% rate is good and it will make me feel more secure in the long run, even if we end up paying more in interest. I guess that's the trade off for security. 

I did start toying with the idea of the 7 year fix, but I think for my family that's just too long a time and as we plan to overpay as we go along, we won't benefit from any improved LTV if we commit to 7 years.

I will go for the 5-year fix and God help us all as there could be rocky times ahead. 

Truss caused such a colossal damage but she still gets her former PM £115,000 a year allowance. She is OK but we are the ones who suffer.

At8

michaels said:

At8 said:

There is £240,000 left to pay, 24 years left.
Please help me out as I need to make a decision. Thank you!

Are those rates still available?

Hi michaels, no they are not available anymore.

bamgbost

5 year fixed - 4.08%

defo the 5 year. We had similar options a month earlier.
And took the 5 year options

At8

Massive thanks to everyone who voted and replied. It was easier to make a decision thanks to your help. I fixed for the 5 years and I think that's the right decision for my family. I hope everyone else who is remortgaging or trying to get their first mortgage, I hope you can all get a deal that works for you and wishing everyone luck.

silvercar

My logic would be that 5 years gives you some time before you need the expense of remortgaging (legals and valuation if you go elsewhere), so the lowest rate for 5 years is a saving on 2 counts (over the 2 year fix).

Also, remember you can always pay a penalty to escape if this change dramatically. You are saving nearly £1000 a year on the 5 year over the 2 year.

enthusiasticsaver

I would go for the 5 year fixed. That gives some security in the current climate where mortgage rates are expected to rise. Plus it is the lowest. The only way it would make sense to take the 2 year is if rates are expected to fall by then and I personally don’t think that is likely let alone certain.