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

[gibby]

Interest rates (as in mortgage rates) have already started to rise. Unless going for a tracker or variable rate mortgage, the BoE base rate doesn't really make any difference. I fixed my mortgage in January for 5 years and from starting my application to completeing it, the same building society had upped their rates, as have all the others. I can't get the deal now that I got then and that has changed in the just 8 months.

Personally, my wife's just given birth, I already have a 12 year old, so knowing the exact amount I have to pay for the next 5 years was the most important thing for us. Yes I could pay less on a variable rate if the rates go down but I could also pay more if they go up and that could really screw us over. Also, all being well, in 5 years time we will have a more favourable LTV, which means you're less of a risk, so they give you a better rate and cheaper payments, which is counter intuitive really, but that's the way it goes.

I started work for a building society when I was 17 and the interest rate then was 15.4% ! Man that would screw most people over these days.

[AudiA8Quattro]

Interest rates (as in mortgage rates) have already started to rise. Unless going for a tracker or variable rate mortgage, the BoE base rate doesn't really make any difference. I fixed my mortgage in January for 5 years and from starting my application to completeing it, the same building society had upped their rates, as have all the others. I can't get the deal now that I got then and that has changed in the just 8 months.

Personally, my wife's just given birth, I already have a 12 year old, so knowing the exact amount I have to pay for the next 5 years was the most important thing for us. Yes I could pay less on a variable rate if the rates go down but I could also pay more if they go up and that could really screw us over. Also, all being well, in 5 years time we will have a more favourable LTV, which means you're less of a risk, so they give you a better rate and cheaper payments, which is counter intuitive really, but that's the way it goes.

I started work for a building society when I was 17 and the interest rate then was 15.4% ! Man that would screw most people over these days.

Good advice..

[dubber36]

What you need to work out is what you are happy paying each month and how much is it ultimately going to cost you.

You could get a 2 year fixed with no fees, and be laughing at the end of it if the rates are still the same, or have to sign up for a new product at a higher rate if things go the other way. Alternatively you could pay out more money over 5 years safe in the knowledge that you know what you are going to have to pay each month. No one realy knows what is going to happen, so you pays your money and all that.

Each time I have renewed, I have never taken too much notice of the rates. I have added up all the payments with or without fees and worked out which deal I ultimately pay less for. Also if you are able, reducing the length term will bring the day when the mortgage burden is finally over that little bit closer.

[T_J_G]

So what (if any) did you go for?

[Diamond Hell]

We've fixed for two years, after much reading up and lots of discussion at home.

If we can't get something around 4.19% for five years in two years then I am going to have a massive 'told you so' moment with Mrs Hell.

[R32UK]

you can ask for the pants back then too

[T_J_G]

What's your LTV if you don't mind me asking, feel free to PM.

[Diamond Hell]

We have about 27% equity.

[Wazzzer]

We have about 27% equity.

a tad better than my 17% then 

[Rhyso]

We have about 27% equity.

a tad better than my 17% then 

Stop spending money on the Golf then 

Need to start looking at mine ASAP so I can spend more on the Aldi