FTB - 5 or 10 year fix

Fufu3333

As a 28 yr old ftb would you advise against taking a 10 year fix on a new build house?

pramsay13

10 years is a long time but if you are planning on staying in the house that long and you can afford the repayments comfortably then it's maybe worth considering so that there aren't any uncomfortable interest rate rises.
That said I reckon it will probably rise slightly and level off before dropping a bit in a few years, so I've recently fixed for 2 years. 

ACG

You need to think about your circumstances. 
I am 38, 10 years ago (I was also 28 when I bought my first home), I had a gf but nothing serious. I bought the house as it was within budget and I wanted to move out. 

Within 5 years, my gf moved in, she got pregnant and we moved house. I ended up doing a 2 year fix, another 2 year fix and then a variable rate with no ercs for about 8 months as we knew we were going to move by the end of the second 2 year fix. 

Last year I did a 5 year fix as things are a little more stable (I also wanted the security from rate rises). 

Sorry for the life story. I suppose the point I was trying to make is that you need to think about your plans and also things that might happen even if they are not planned. A 10 year fix leaves you at the whim of your mortgage lender to an degree for a very long time. I have known people wo buy a house, get married, have a kid and get divorced in 10 years! 

RelievedSheff

I certainly wouldn't take a 10 year fix on a first property. It is too long a fix for a first time buy.

datlex

Assuming you are a first time buyer 10 years is a long time to fix at current interest rates and presumably not having a great LTV.  Even 5 years is a tad high at present.

Fufu3333

Thanks all for your feedback. With a deposit of 70,000, new build price of 255,000, broker is looking at Nationwide's helping hand mortgage with a 5 year fix. Could this be problematic? 

PixelPound

No problem. People are giving opinions on what they would do, it depends on what is right for you. 

Is security knowing what the instalment will be important, or are you willing to risk it going up for the chance it will go down. Maybe you might want to move in a few years if its small and you start a family, or want to relocate. So that flexibility important. 

Inflation may well come down and eventually so will interest rates. We may never see ultra low again and rates don't go below 3%, or economic circumstances push it down to below that. 

We've a GE due in a few years, so could be different government with different priorities. Could be more destabilising events in the world and interest rates go above where they are now.