why pay them that extra a month, when in 3yrs you may want to move and ergo have to pay penalty fees for closing early
Because in two years the rates may go up above their current level, so for three of the five years I could end up paying 'them' more than I am now. You don't seem to be able to wrap your head around this 'pay slightly more now, possibly pay significantly less for 3/5 years' concept, do you?
I have two young kids who have just started school. It is very unlikely (although not impossible) that I will move because of the upheaval it would cause in the life of my kids. If you don't have kids, maybe you don't understand what a significant factor that is in considering this scenario?
Or maybe you live somewhere sh*t? I don't, so I'm not really interested in moving.
If I'm unlikely to move then securing the rate my mortgage is paid at for five years is of significant value because it is one less variable in my financial life.
Different products suit different people at different stages of their life. If you travel the route of 'always take the cheapest deal right now' then you may find you wind up paying more overall at various stages in your life.
Step away and have a think about what you're saying - there is no 'right' answer here until five years hence when all three scenarios can be played out. What there are, are different personal circumstances which will give different people different levels of predisposition for different products.
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