2 Year or 5 Year Fixed?

stokegal

Hi all,

Just after some different opinions on my remortage scenerio

House value with current provider £167k, ourtstanding mortgage £124k (LTV 74%)

£124k mortage made up of 2 products
£116k (2.65% fixed 30/06/2024)
£8k (2.65% fixed 30/06/2024)

Offered the below fixed rate

2 year (fixed 31/08/2026)
4.99% + £799 fee
5.15% no fee

5 year (fixed 31/08/2029)
4.61% + £799 fee
5.09% no fee

I need to select a different rate for both the £8k and £116k independantly

For the £8k I was going to take the 2 year fixed no fee (The 5 year is only 41p per month cheaper)

I am wobbling with what to do about the £116k

2 year + fee = £699.34 / month
2 year no fee = £710.03 / month

5 year + fee = £674.31 / month
5 year no fee = £706.01 / month

My gut was to take the £116k with 5 year + fee and the £8k on 2 year + no fee.

For context the house is actually worth about £190k / £200k when we have finished our garden but we are mid renovating my partners house so dont have the time to get a proper valuation done at the moment but we could definately drop the LTV ratio

We want to move next year (all rates can be ported)

We may want to release some equity in the future to invest in another property, however still want to keep LTV down so will need value houser then.

So inaddition to the current offer we are also thinking do we want to stress ourselves to get the garden finished for another mortgage valuation where we would be approx 63% LTV - release equity for another property or hold on and see if we can do this with current provider in the future?

Make sense??? My head hurts lol

Any opinions welcome!

BarelySentientAI

Must be one hell of a garden to add £30k onto a £170k property.

As with every other time this question is asked, we can't tell you.  Only you know whether the extra 3 years of knowing what you will pay is better or worse than the chance of missing out on a better deal that you might or might not get in 2 years time.

stokegal

Thanks for the comment, I think am I so torn as I cant answer it either.  And cant find a logical way to come to a decision rather than "feeling"

Also, the garden isnt that big lol, the house was sold to me with a heavy discount (around £25k) 2 years ago as I bought it from a family member.  Since then we have added a sizable garden room and are mid landscaping the rest of the garden

BarelySentientAI

stokegal said:

Thanks for the comment, I think am I so torn as I cant answer it either.  And cant find a logical way to come to a decision rather than "feeling"

Also, the garden isnt that big lol, the house was sold to me with a heavy discount (around £25k) 2 years ago as I bought it from a family member.  Since then we have added a sizable garden room and are mid landscaping the rest of the garden

To be fair, that's often as good a reason as any.  And there's nothing inherently 'bad' about making a legitimate decision that later turns out to be the wrong one.

Personally, I value the predictability of a longer fix more than I would regret missing out on a slightly lower rate in the future.  Others beat themselves up if they aren't on the lowest possible rate at all times and think they've made a huge mistake.

Newbie_John

We don't know what rates will be in 2025, 2026... among what you've been offered the cheapest is 5 years with a fee. So I'd take that. In 5 years time you can make another decision and again picked the cheapest option. This way you are guaranteed to do at least a "good choice". (If you pick a 2 years and rates in 2026 are very low then it would have been a very good choice, but if rates are higher then it would be a bad choice - but we don't know, we can only speculate).