2year or 5year fixed rate
Discussion
Crystal ball not working?!?!
Tbh no one really knows, I'm going 5 years fixed this time - reasons are:
1. Wife currently on maternity - not sure if she will want extra time off
2. High possibility she may well be made redundant - they are restructuring at work as we speak
3. Remortgaging if she has been made redundant will be a no go - can't afford the house just on my salary (wife has savings to cover mortgage payments for the next 5 years - £35k in savings)
Current mortgage provider (Nationwide) have offered us 1.89% for 5 years with £999 fee - and no need to provide payslips etc. If I go with a new provider, providing payslips etc could mean we don't get the mortgage (as they don't take savings into account).
Think 2 year fixed was 1.59% with £999 fee.
I can't see interest rates changing much tbh, they are very low as it is.
Tbh no one really knows, I'm going 5 years fixed this time - reasons are:
1. Wife currently on maternity - not sure if she will want extra time off
2. High possibility she may well be made redundant - they are restructuring at work as we speak
3. Remortgaging if she has been made redundant will be a no go - can't afford the house just on my salary (wife has savings to cover mortgage payments for the next 5 years - £35k in savings)
Current mortgage provider (Nationwide) have offered us 1.89% for 5 years with £999 fee - and no need to provide payslips etc. If I go with a new provider, providing payslips etc could mean we don't get the mortgage (as they don't take savings into account).
Think 2 year fixed was 1.59% with £999 fee.
I can't see interest rates changing much tbh, they are very low as it is.
gazza5 said:
Crystal ball not working?!?!
Tbh no one really knows, I'm going 5 years fixed this time - reasons are:
1. Wife currently on maternity - not sure if she will want extra time off
2. High possibility she may well be made redundant - they are restructuring at work as we speak
3. Remortgaging if she has been made redundant will be a no go - can't afford the house just on my salary (wife has savings to cover mortgage payments for the next 5 years - £35k in savings)
Current mortgage provider (Nationwide) have offered us 1.89% for 5 years with £999 fee - and no need to provide payslips etc. If I go with a new provider, providing payslips etc could mean we don't get the mortgage (as they don't take savings into account).
Think 2 year fixed was 1.59% with £999 fee.
I can't see interest rates changing much tbh, they are very low as it is.
Does anyone know how the product fee works? It might sound like a stupid question, but I can't get my head around it.Tbh no one really knows, I'm going 5 years fixed this time - reasons are:
1. Wife currently on maternity - not sure if she will want extra time off
2. High possibility she may well be made redundant - they are restructuring at work as we speak
3. Remortgaging if she has been made redundant will be a no go - can't afford the house just on my salary (wife has savings to cover mortgage payments for the next 5 years - £35k in savings)
Current mortgage provider (Nationwide) have offered us 1.89% for 5 years with £999 fee - and no need to provide payslips etc. If I go with a new provider, providing payslips etc could mean we don't get the mortgage (as they don't take savings into account).
Think 2 year fixed was 1.59% with £999 fee.
I can't see interest rates changing much tbh, they are very low as it is.
I'm also with Nationwide, and looking to renew my deal shortly, looking to fix for 5 years, and they offer a 5 year fixed without a product fee, and a 5 year fixed with a product fee of £999. It then shows the total payable for each deal, INCLUDING the product fee, and the deal without the product fee is cheapest overall?
Why would I choose the deal with the product fee? Unless I'm missing something obvious? Is this due to the amount I'm borrowing? <50K?
I’m going 5 years, 60% LTV at 1.88% with Lloyds.
I’ve based this on my feeling that over the next years rates are more likely to go up than down and house prices more likely to go down than up.
I could be wrong, but at lower risk than being right. Also only one £999 fee over five years, rather than 2.5 renewing every two.
I should also be in a positing to clear the mortgage in 5 years, I won’t be in that position after two.
I’ve based this on my feeling that over the next years rates are more likely to go up than down and house prices more likely to go down than up.
I could be wrong, but at lower risk than being right. Also only one £999 fee over five years, rather than 2.5 renewing every two.
I should also be in a positing to clear the mortgage in 5 years, I won’t be in that position after two.
colin86 said:
2 year - 1.89
5 year - 2.09
Both deals have no fee to pay . A guess it is a crystal ball question just looking for peoples thoughts. Wondering in maybe couple a years the interest rates will take a big jump up .
Thanks
What does the spread look like on trackers at the moment?5 year - 2.09
Both deals have no fee to pay . A guess it is a crystal ball question just looking for peoples thoughts. Wondering in maybe couple a years the interest rates will take a big jump up .
Thanks
My 5-yr fix ended in April and I have just fixed for another 5 years, at a lower rate.
Looking at affordability without any element of trying to forecast rates, given that current mortgage rates are so low (viewed over the last 50 years or so) it just seems to make sense to enjoy fixed low payments for 5 years in an uncertain world.
Considering the future, with inflation more likely to rise than fall, and base rate more likely to rise than fall from today's rate, it feels unwise to expect a reduction in mortgage cost in two years for the next three years.
I have no crystal ball, and I'm just as likely to be as right or wrong as anybody else, but can't see any good reason to take the 2-yr option in today's market.
A minor point perhaps, but it also means not having to deal with paperwork, an incredibly dull chat with the lender, and pay a fee for another 5 years!
Looking at affordability without any element of trying to forecast rates, given that current mortgage rates are so low (viewed over the last 50 years or so) it just seems to make sense to enjoy fixed low payments for 5 years in an uncertain world.
Considering the future, with inflation more likely to rise than fall, and base rate more likely to rise than fall from today's rate, it feels unwise to expect a reduction in mortgage cost in two years for the next three years.
I have no crystal ball, and I'm just as likely to be as right or wrong as anybody else, but can't see any good reason to take the 2-yr option in today's market.
A minor point perhaps, but it also means not having to deal with paperwork, an incredibly dull chat with the lender, and pay a fee for another 5 years!
sideways sid said:
My 5-yr fix ended in April and I have just fixed for another 5 years, at a lower rate.
Looking at affordability without any element of trying to forecast rates, given that current mortgage rates are so low (viewed over the last 50 years or so) it just seems to make sense to enjoy fixed low payments for 5 years in an uncertain world.
Considering the future, with inflation more likely to rise than fall, and base rate more likely to rise than fall from today's rate, it feels unwise to expect a reduction in mortgage cost in two years for the next three years.
I have no crystal ball, and I'm just as likely to be as right or wrong as anybody else, but can't see any good reason to take the 2-yr option in today's market.
A minor point perhaps, but it also means not having to deal with paperwork, an incredibly dull chat with the lender, and pay a fee for another 5 years!
Rather than consider if things will change over the next 5 years, you need to only consider if they’ll change over the next two. The fee will be outweighed by the lower 2 year rate and if things don’t change over two years then you have the 5 year option in 2 years time again. Looking at affordability without any element of trying to forecast rates, given that current mortgage rates are so low (viewed over the last 50 years or so) it just seems to make sense to enjoy fixed low payments for 5 years in an uncertain world.
Considering the future, with inflation more likely to rise than fall, and base rate more likely to rise than fall from today's rate, it feels unwise to expect a reduction in mortgage cost in two years for the next three years.
I have no crystal ball, and I'm just as likely to be as right or wrong as anybody else, but can't see any good reason to take the 2-yr option in today's market.
A minor point perhaps, but it also means not having to deal with paperwork, an incredibly dull chat with the lender, and pay a fee for another 5 years!
I made my decision based on believing there will be negative change within the next 24 months and being in a position to clear at the end of the fixed term.
Also if you're thinking of going 5 years then you can give yourself a little more flexibility by introducing a fixed offset mortgage to allow you to save against the rate should you earn more / come into more money during that time period if that's of interest.
Sarnie of this parish sorted me a sub 2% 5 year fixed offset late last year, don't know what's available currently but I don't think it will be too different based on how little standard fixed rate mortgages have changed.
Sarnie of this parish sorted me a sub 2% 5 year fixed offset late last year, don't know what's available currently but I don't think it will be too different based on how little standard fixed rate mortgages have changed.
sideways sid said:
My 5-yr fix ended in April and I have just fixed for another 5 years, at a lower rate.
Looking at affordability without any element of trying to forecast rates, given that current mortgage rates are so low (viewed over the last 50 years or so) it just seems to make sense to enjoy fixed low payments for 5 years in an uncertain world.
Considering the future, with inflation more likely to rise than fall, and base rate more likely to rise than fall from today's rate, it feels unwise to expect a reduction in mortgage cost in two years for the next three years.
I have no crystal ball, and I'm just as likely to be as right or wrong as anybody else, but can't see any good reason to take the 2-yr option in today's market.
A minor point perhaps, but it also means not having to deal with paperwork, an incredibly dull chat with the lender, and pay a fee for another 5 years!
So why not fix for 10 years?Looking at affordability without any element of trying to forecast rates, given that current mortgage rates are so low (viewed over the last 50 years or so) it just seems to make sense to enjoy fixed low payments for 5 years in an uncertain world.
Considering the future, with inflation more likely to rise than fall, and base rate more likely to rise than fall from today's rate, it feels unwise to expect a reduction in mortgage cost in two years for the next three years.
I have no crystal ball, and I'm just as likely to be as right or wrong as anybody else, but can't see any good reason to take the 2-yr option in today's market.
A minor point perhaps, but it also means not having to deal with paperwork, an incredibly dull chat with the lender, and pay a fee for another 5 years!
rockin said:
A couple of questions,
I understand the point you are making, but the last ten years are not indicative of "normal" economic conditions.......the BoE chief yesterday warned of more "frequent" rate rises in the future.........so anyone considering tracker rates currently because "rates have hardly moved in the last ten years" should consider this carefully..........it's not like when rates were 5-6% and taking a fixed was a risk in case rates dropped.......rates are on the floor currently..........fixed all the way in my opinion......five years too.......but not ten years in most circumstances, again, in my opinion.....- During the last decade has anyone who "fixed" achieved financial benefit from doing so?
- What has been the typical "cost" of fixing, say, a £250k mortgage through the last decade - compared with variable rate, including fees?
Sarnie said:
rockin said:
A couple of questions,
I understand the point you are making, but the last ten years are not indicative of "normal" economic conditions.......the BoE chief yesterday warned of more "frequent" rate rises in the future.........so anyone considering tracker rates currently because "rates have hardly moved in the last ten years" should consider this carefully..........it's not like when rates were 5-6% and taking a fixed was a risk in case rates dropped.......rates are on the floor currently..........fixed all the way in my opinion......five years too.......but not ten years in most circumstances, again, in my opinion.....- During the last decade has anyone who "fixed" achieved financial benefit from doing so?
- What has been the typical "cost" of fixing, say, a £250k mortgage through the last decade - compared with variable rate, including fees?
Fittster said:
Sarnie said:
rockin said:
A couple of questions,
I understand the point you are making, but the last ten years are not indicative of "normal" economic conditions.......the BoE chief yesterday warned of more "frequent" rate rises in the future.........so anyone considering tracker rates currently because "rates have hardly moved in the last ten years" should consider this carefully..........it's not like when rates were 5-6% and taking a fixed was a risk in case rates dropped.......rates are on the floor currently..........fixed all the way in my opinion......five years too.......but not ten years in most circumstances, again, in my opinion.....- During the last decade has anyone who "fixed" achieved financial benefit from doing so?
- What has been the typical "cost" of fixing, say, a £250k mortgage through the last decade - compared with variable rate, including fees?
SunsetZed said:
Moving can be trickier, overpaying is limited if you come into money etc. Basically a lot can change in 10 years, twice as much as in 5 some might say
Interest rates are ridiculously I would go for 5 or 10 years. If you come into money etc then invest in other things. Interest rates are only going one way and could you cope if they changed to triple+ those figures? Fittster said:
As things are a historically low levels, why not lock them in for ten years? Surely any logic that supports 5 years fixed also applies to 10 years fixed.
No........in most circumstances it's too long...........I've remortgaged more people OFF ten rates (incurring ERC's in the process) than we have put people on them.....rockin said:
One of the few certainties in life is that if fixing looks cheap it may not be worth fixing at all.
As with all forms of insurance the "premium" reflects the "risk", as seen by the company to which you pay the premium.
But when the "premium" is so miniscule, if there even is a premium, then it's a no brainer currently.......As with all forms of insurance the "premium" reflects the "risk", as seen by the company to which you pay the premium.
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