App. for 2 yr fixed being processed but 5 yr better?

despairing

I was hoping someone might be able to advise me on the following:

Our adviser recomended a 2yr fixed deal with Halifax at 5.62 per cent and without querying it we set about applying for it (end of last week). Having read postings here, I thought 'hang on a min., maybe 5 yr fixed would be better'. I've asked him and he says Halifax could give us 5.72 on 5 yr fix but may charge 500 pnd fee since we've already applied for 2 yr fixed. He also says 2 yr fixed is better given current instability; better to shop around again in 2 yrs for better deal.

Anyone any opinion on this please?

minimike2

The term of the deal should be based on YOUR prefrence and circumstances. If your broker thinks that 5.72% is a high rate then im afraid he is living in cloud cookoo land. Rates ARE NOT HIGH, they just arent as artificially low as we have enjoyed over the last five years. I would be interested to see his reasons for recommendation in the suitability letter. You need to establish what term of deal is better for you bu looking at your potential lifestyle changes and your attitude to risk, and what value you want from fees rather than trying the impossible task of predicting where the market will be in two years time.

nathanhill69

Wise words from minimike2....

I'm not saying that your Mortgage broker is wrong as he may have recommended the 2 year product based on your needs, circumstances and such like. However, there does seem to be a certain type of broker who are attempting to second guess the market and what the situation might be like in two years time - to be perfectly frank they probably do not have the economics expertise to even speculate on this.

minimike2

Exactly. Im a mortgage broker / adviser.....im not an analyst and dont even begin to prentend I am one. Of course I know my market, but its not my place to advise based on what I think may or may not happen in the future, its all about the client and what suits them best based on what they think may happen in their own futures, or what they are willing to or to not take a risk on.