fixed rate or not on mortgage???

teacher2mum

Hi can anyone please advise. We are raising mortgage for our new business. we have raised 2/3 through a buy to let mortgage on a spare property we had which was originally paid by cash. The other 1/3 from another commercial mortgage. Obviously both are more expensive then a normal mortgage. We have been asked by one of the lenders is we want a fixed rate at 6.49 % over either 3 or 5 years or not. Can anyone else advise us as we are in a dilemma because of the current market. thanks!:rotfl:

Savvy_Sue

If you're asking can anyone see what interest rates will be doing over the next 3-5 years, I think the answer is obvious. Even if anyone gives you an answer here, you have no way of knowing whether you can rely on the advice given.

Which leaves the question of whether a fixed rate would be helpful in terms of knowing what that particular part of your outgoings is going to be for 3-5 years. And if it would be helpful, how helpful?

does that help at all?

Savvy_Sue

On second thoughts ...

MOVING THREADS FOR BETTER RESPONSES

Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere (please see this rule) so this post/thread has been moved to the Mortgages board, where it should get more replies. If you have any questions about this policy please email [EMAIL="abuse@moneysavingexpert.com"]abuse@moneysavingexpert.com[/EMAIL].

jammie*dodger

Can you afford to repay at the fxed rate for the next 5 years? If so then at least you have the peace of mind.

Put another way, can you afford the repayments if they go up to 10%? If not then depending on how much of a worrier you are you might want to fix the rate.

Personally I like to know how much my outgoings are and the only decision I need to make at the moment is wether to fix for 5 or 10 years ;-)

Cheers, Rob.

Treadmill

I have a 10 year fix and you run the full gamut of emotions from smugness when the base rate goes up to kicking youself when it drops, on the whole though if your fix is at about 5.5% I reckon you do OK as you don't keep paying fees every 2-3-5 years.

teacher2mum

Thanks Guys!

rdsmortgageman

Remember that if you fix for 3-5 years, there is likely to be redemption penalty. If all doesn't go to plan, you may need to sell the property to generate income and reduce outgoings. I would suggest considering something with no redemption penalties (even for the first year or two), so that you have options.

bankersmug

Treadmill wrote: »

I have a 10 year fix and you run the full gamut of emotions from smugness when the base rate goes up to kicking youself when it drops, on the whole though if your fix is at about 5.5% I reckon you do OK as you don't keep paying fees every 2-3-5 years.

That is so true!