New mortgage deal - fix two, three or five years?

[T_J_G]

Five year fixed IMO. Should be beneficial over the period but every move is a gamble at the moment.

[dom]

I have just gone for a 3 year fixed mortgage, the difference in monthly repayments between 3 and 5 years was uneconomical for me.

[gibby]

It's all down to attitude to risk and if you think the rates are going to go up or down really. We just started a 5 year fixed deal as the wife is likely to work less after she finishes maternity leave next year, so a two year deal would have seen us struggling to get a decent deal so we went 5 year so we could just forget about it. If you have some decent savings I'd also recomend an offset mortgage as your money will work for you better against the mortgage at the moment rather than the measly savings rate.

[AudiA8Quattro]

If you are sure that you won't be moving then go for 5 years.
That's exactly what i have just done..

[R32UK]

Fix two.

rates could get better.
rates could get worse.

50/50

but with the fact of the 3 or 5 option, you will be losing £720 or £1800 just for the privelage.
but still the chance of the rates getting better, meaning you could miss out on saving yourself a rather nice sum.

please explain how its a 50/50 chance 

[R32UK]

recession.. its not a new thing.

not gospel but worth a read... I enjoyed spotting the similarities 

http://en.wikipedia.org/wiki/Early_1980s_recession

[AudiA8Quattro]

You can lose money with fixed, but the point is security, interest rates can surge upwards at an alarming rate, it's happened before...

[bored_Welsh_lad]

I am having massive dramas at the moment, 5yr fixed is up, property has lost so much value that I need a 95% mortgage to fix again which is an issue because I am getting married and need to rent the house out and the need a 25% deposit..Sucks!

[The Mighty Elvi]

Inflation rate is 2.4%, the lowest it has been for 2 years, down from a high of 5% at the end of 2011.  With the BOE contemplating reducing the interest rate to 0.25%, it's worth considering fixing it for only 2 years.

Or if the reduction comes sooner, then go for a tracker. HSBC is doing a 2 year for 2.49% and the reverts to SVR after, which by that time may be very low.

With the economy and housing market in decline, together with low oil demand globally, I don't foresee the BOE raising the interest rate any time soon.  There is plenty of spare capacity in the economy to cope with a sudden growth before generating any inflationary pressures.


 

[AudiA8Quattro]

how do you know what the uk economy is going to do over the next 5 years.

This.
Exactly the reason to go for a longer fixed rate.