Fix mortgage for 5 years or shorter?

Chucklechops

Hi

I have a mortgage with Barclays.

My fixed-rate rate is coming to an end, and I wish to stay with Barclays.

I'm wondering whether to fix again, this time for for 5 years, but I'm not sure if this is the right thing to do. Initially I thought so - due to all the uncertainty in the world right now, I assumed the base rate would increase. But having done some research, now I'm not so sure. Maybe a 1 or 2 year fix would be better?

I don't want to pay any product fee.

The following offers are available to me:

5-year fix at 4.26%.
1-year 5.13%
2-year fix at 4.2%

Any guidance would be gratefully received.

Many thanks.

pramsay13

It's up to you. Do you want to take a risk that rates will be better in 2 years and fix until then, or have a set amount for 5 years that will allow you to budget.

Edi81

It all comes down to your personal attitude to risk and personal circumstances. 

Also, why no fee? Is it because the mortgage amount doesn’t make it worthwhile? 

Chucklechops

I prefer to know that my mortgage will stay the same amount. I don't want to pay a fee because the mortgage is relatively lo, but also I expect to pay it off in around 5 years.

I just can't work out whether rates are likely to rise or fall...

Thanks

pramsay13

No-one knows whether mortgage rates would rise or fall.
That's always the issue.
What have you done for the last 20 years of your mortgage?
They are predicting they will fall slowly for a bit but that could be nonsense, or they could but then stay the same for years, or rise again by a few percent. 
It would be worth using a mortgage calculator that allows you to put in fee details as sometimes you can get a better rate by including a fee, especially over 5 years it might be worth it.

poppy10_2

The markets currently predict that the Bank of England base rate will be 2.5% in two years time (compared to the current 4.5&). But that is just a guess and could be wrong. Depends whether you would be willing to take the risk

In the current climate I'd take the 2 year deal, having always had five year deals until now

Happypuppy1

As others are saying this is very much personal choice, attitude to risk.   If you want certainty for longer, go for the longer fixed rate and perhaps overpay if your circumstances and mortgage product allow.  If you want to take a punt that inflation will stabilise and rates will come down, go for a shorter term product, or a tracker which will move with the rate.