5 year fix?

AdmanPea

Hi all 

We are in process of moving house and with a 80% l tv we can get a five year fix at 4.15% with the bank. Would five year fixing be best way forward you think or should I shorten it and go with a two year in the hope rates are continuing to drop? 

I know this is an impossible question in many ways. I’m minded to go five just for stability 

user1977

There isn't going to be some sort of general "correct" answer. The main factor for choosing a length of fix is when you think you might want to do something different e.g. sell the property.

AdmanPea

We view this as our forever home (barring a big change in circumstances) 

Poor_Leno

The biggest change in circumstance for you in that case will simply be the money markets, and how they might react to a - potential - seismic change in government and, maybe, government policy.  a 3 year fix takes you to 3-4 months BEFORE the 2029 general election.  So, if you think sour times might arrive thereafter regarding rates, it could be worth considering a 3 year fix, then 5.

My mortgage is due for renewal in March and its tough to weigh up.  Would the markets recover within 2 years of a Reform government if I did a 5 year fix?  Or will interest rates potentially be stubbornly up around the 5-6% mark (they could be).  I'm either doing a 3 or 5 year anyway.  10 seems pointless really, but for someone in a forever home it might be worth considering if rates were to go back to where they were post-truss...  

webjaved

Poor_Leno said:

The biggest change in circumstance for you in that case will simply be the money markets, and how they might react to a - potential - seismic change in government and, maybe, government policy.  a 3 year fix takes you to 3-4 months BEFORE the 2029 general election.  So, if you think sour times might arrive thereafter regarding rates, it could be worth considering a 3 year fix, then 5.

My mortgage is due for renewal in March and its tough to weigh up.  Would the markets recover within 2 years of a Reform government if I did a 5 year fix?  Or will interest rates potentially be stubbornly up around the 5-6% mark (they could be).  I'm either doing a 3 or 5 year anyway.  10 seems pointless really, but for someone in a forever home it might be worth considering if rates were to go back to where they were post-truss...  

Interesting points raised here....

Altior

webjaved said:

Poor_Leno said:

The biggest change in circumstance for you in that case will simply be the money markets, and how they might react to a - potential - seismic change in government and, maybe, government policy.  a 3 year fix takes you to 3-4 months BEFORE the 2029 general election.  So, if you think sour times might arrive thereafter regarding rates, it could be worth considering a 3 year fix, then 5.

My mortgage is due for renewal in March and its tough to weigh up.  Would the markets recover within 2 years of a Reform government if I did a 5 year fix?  Or will interest rates potentially be stubbornly up around the 5-6% mark (they could be).  I'm either doing a 3 or 5 year anyway.  10 seems pointless really, but for someone in a forever home it might be worth considering if rates were to go back to where they were post-truss...  

Interesting points raised here....

Would the markets recover if Labour won again?

Will Labour survive until 2029?

They are daft points in my opinion, as we are dissuaded from political debate on here (a stance I disagree with), it's a little tricky to address them.

What I can say is factual, that the UK CURRENTLY has the highest cost of sovereign debt servicing in the G7.  Whether that will remain the case in two, three or five years, nobody knows. 

Jemma01

As far as YOUR personal circumstances, what difference does it make if you go for 5 or 2?
The market is unpredictable. I was told to fix mid 2024 because the inflation rate is rising and the economy will collapse and bla bla, and I'm not an economist or remotely care about it. I decided that my personal goal is to pay off the mortgage ASAP and if interest goes up, tough luck, if it goes down great. And I went for a tracker and the interest rate has been going down, hopefully one more on Thursday.

Your circumstances and the need for stability (or fast payment out of the mortgage) might be the best way to judge what you should do next.

amnblog

If you are on an 80% loan to value product now, you most likely chance to reduce interest is taking another new rate when you are on 75% loan to value. Are you on track for that to happen in the next couple of years?

If not, stability for five years may be your thing.

webjaved

Altior said:

webjaved said:

Poor_Leno said:

The biggest change in circumstance for you in that case will simply be the money markets, and how they might react to a - potential - seismic change in government and, maybe, government policy.  a 3 year fix takes you to 3-4 months BEFORE the 2029 general election.  So, if you think sour times might arrive thereafter regarding rates, it could be worth considering a 3 year fix, then 5.

My mortgage is due for renewal in March and its tough to weigh up.  Would the markets recover within 2 years of a Reform government if I did a 5 year fix?  Or will interest rates potentially be stubbornly up around the 5-6% mark (they could be).  I'm either doing a 3 or 5 year anyway.  10 seems pointless really, but for someone in a forever home it might be worth considering if rates were to go back to where they were post-truss...  

Interesting points raised here....

Would the markets recover if Labour won again?

Will Labour survive until 2029?

They are daft points in my opinion, as we are dissuaded from political debate on here (a stance I disagree with), it's a little tricky to address them.

What I can say is factual, that the UK CURRENTLY has the highest cost of sovereign debt servicing in the G7.  Whether that will remain the case in two, three or five years, nobody knows. 

I think the markets would be worse off under Reform. 

fergie_

It really depends on what the 2y rate is and if you want surety or not. It also depends on your income expectations and ability to over pay vs cope with an increase.

Have a look at 75% vs 80% rates. If the difference is close, then that doesn't really matter. The other aspect that impacts LTV of course is property values (more so than repayments).