Fixed rate or tracker : First time buyer

remo_2

Hi, I'm a first time buyer.
I'm looking for a good mortgage deal.
HSBC is offering me at 5 year fixed interest at the rate of 5.39%.
and 3 year fixed rate is 5.77%.
I'm not sure, whether having a 5 year fixed interest rate is a good idea.
My woory, What if, the BoE interest rate after two years is 4%? Is it a plausible or a foreseeable situation (appears to be)?
Is the tracker a good option? HSBC offer BoE bas rate + 0.99%...
Kindly advice.

barrymoney

5.39 fix sounds ok to me (depending on fees), compared to a +0.99 tracker. I'm on a tracker, so I'd love 4% rate, but I just don't see things dipping that low.

vwjo

What's your LTV remo?

remo_2

Thanks for your suggestions guys...

my LTV is 85%

Booking fee for fixed 5.39 rate is £999 at HSBC.
Booking fee for fixed 5.77 rate is £499 at HSBC.

Gorgeous_George

For a £100K mortgage:

The 5.39% rate is best if the SVR (after the deal ends) is 6.3% or less. At 6.4% or more and the 5 year fix is better. That is over the term of the mortgage (25 years).

GG

sarkin

take the 5 year fixed, rates may come down this year but over the next 5 they will go up IMHO