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

[R32UK]

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

with rates at 0.5% how many times can they go down? how many times can they go up?

you cannot judge by whats happened in the past

Thats exactly what you can do with the past... what else is it useful for?

you cannot trust what the house of lords say as they lie, and decieve.

What does the house of lords have to do with this? 


sometimes its better to just keeep 

[Diamond Hell]

sometimes its better to just keeep 

 

I'm veering towards the five year fixed, on the basis that there's only likely to be at max a cut of 0.4% in the BOE base rate and things are more likely to go sh*t-shaped and interest rates head north in the 3-5 year range..... although that's nearly a reason to go 2 year fixed and review at that point.... but what if things are on the skids at that point and rates are rising already?

Could things change that fast, that badly?

how do you know what the uk economy is going to do over the next 5 years. you cannot judge by whats happened in the past. you cannot trust what the house of lords say as they lie, and decieve.

The only thing you'll see crystal ball gazing is a load of crystal balls as a mentor once sagely told me.  History can teach us a lot though.... provided you're able to deliver some interpretation rather than just looking going 'yeah stuff happened, innit'.

I am curious about the comment about the House of Lords.  It's like saying 'you cannot judge by whats happened in the past. you cannot trust the department of education.'  Makes about as much sense in this context..... or does it?  Can you enlighten us?

[Agreeable Slick]

Two year fix if you are confident in the market staying stagnent so you can pick up a better or equal fix in future.

3 year - is there really much value in this one?

5 year - comfort of knowing that even if rates exponentially increase that you'll be plumped on a reasonable rate for the duration.

Other option.... drop on a SVR then when the market looks like going north quickly jump on to a nice fixed rate.

This is of course assuming you will not be moving or buy to letting in the forseeable future.

Might be worth going shorted term and looking at making larger over payments (depending on how much you can pay back per month/year) which will obviously decrease the time and amount you pay quite substancially.

[Diamond Hell]

Might be worth going shorted term and looking at making larger over payments (depending on how much you can pay back per month/year) which will obviously decrease the time and amount you pay quite substancially.

Totally get that, but I have two young kids and Mrs Hell isn't back into work proper yet - soon as we can over-pay we will.

Plus when we moved from Bristol (and sold there) we kept the new mortgage at the same term as we'd got to previously in Bristol so we started on 20 years.  For me the time to over-pay is probably from about five years hence.  Ooooh - long term planning: I feel SO grown up. 

[Agreeable Slick]

Sounds like a 5 year fix is a sure fire winner then? Given circumstances and over all plan to over pay.

I've just started my mortgage trip and fixed for 5 years for the exact reason that I know how much will be required each month so I can budget to that. However I can repay up to 20% of the monthly payment each month which if I stick to the plan I intend to start doing after the first 12months.

[Kerrse]

5 years, unless the country suddenly goes bust I can't see rates getting much lower will possibly do a little lower but will not stay low for the next 5 years that is for sure !

[MAW73]

I would go 5 years if your staying in th house. I always to fixed rate mortgages so you nw where you are. What pees me off is when your existing lender charges you an arrangement fee for literally pushing the button on a new deal.

[T_J_G]

Sounds like the security of 5 year is exactly what you need. Then overpay as said earlier (if possible)

[gibby]

Another option we looked at was a 5 year deal, but it was a tracker for the first two years and then fixed for the remaining three. That way you have the gamble of keeping payments low for the 1st two years and if rates do rise sharpley (unlikely) you then only have a short term to battle through it and then have the security of a fixed rate deal for the last three years. Unfortunately, these only seem to make sense if you have a lower LTV other wise the fixed rates do seem to rise.

[R32UK]

not sure if this is an option but if it is then its certainly worth a look... fantastic way of being flexible and reducing the overall time period of the mortgage

http://www.banking-guide.org.uk/all-in-one-account.html