Fixed Rate - how long to lock in for?
Discussion
Looking to get my first mortgage. I've got a 25% deposit so things are looking good for my choices. I like the security of a fixed rate, but I'm currently torn between fixing for 5, 10 or 15 years.
Rates are quite decent at the moment, but they could go lower. My income should rise over the next ten years, and who knows if I'll feel the need to move in the next 5-10 years (doubt I'd move sooner).
So, wise pistonheads, would you lock in for ten years in an uncertain market or take the risk and go for shorter fixed length or even a tracker?
Thanks...
Rates are quite decent at the moment, but they could go lower. My income should rise over the next ten years, and who knows if I'll feel the need to move in the next 5-10 years (doubt I'd move sooner).
So, wise pistonheads, would you lock in for ten years in an uncertain market or take the risk and go for shorter fixed length or even a tracker?
Thanks...
Rates could get lower as the cost of borrowing between banks drops BUT it sounds like you're trying to call the bottom of the market which is very dangerous. My advice would be to fix now for as long as you can assuming you don't have any plans to pay off any large lump sums during the fixed period.
The general consensus seems to be that base will remain as is until early next year when rates will begin to rise. They should then settle around 5% or 6%. If you can fix now for 5 years+ for less than that then I can't see you losing out.
All in my humble opinion of course
The general consensus seems to be that base will remain as is until early next year when rates will begin to rise. They should then settle around 5% or 6%. If you can fix now for 5 years+ for less than that then I can't see you losing out.
All in my humble opinion of course
One thing if you do go for fixed make sure it is portable then this removes the issue you have of what if I want to move house as you can move the mortgage with you.
As for what term to fix it for... well impossible to answr. If your fully stretching yourself now but then start to overpay in the future to reduce the term then unless your super lucky with inheritance etc I would highly doubt you could do i in under 10 years unless you live like hermits so given that fee dependant the 10 year seems the best option.
As for what term to fix it for... well impossible to answr. If your fully stretching yourself now but then start to overpay in the future to reduce the term then unless your super lucky with inheritance etc I would highly doubt you could do i in under 10 years unless you live like hermits so given that fee dependant the 10 year seems the best option.
Scraggles said:
25 years at a relatively low rate of interest means peace of mind for the cost of the mortgage, usually the major deduction from salary after tax 
on 5 years at 5.49%, expires end of this year, might chat to independent financial person before then
Talk to them NOW if you want a fixed rate - some lenders offers are valid for 6m.....on 5 years at 5.49%, expires end of this year, might chat to independent financial person before then
Remster500 said:
I am coming off a discount rate in Nov. and will need to change to avoid A&L SVR currently 4.99%. Does anyone know which lenders are holding offers open for 6mths? I should be sorting something out now before it's too late.
Cheers.
Don't know of lenders holding offers for 6 months, we usually arrange mortgages for up to 3 months before the pens expire.Cheers.
It all very much depends on the individual - IF you have high savings then higher rates doesnt really matter as you should be on an offset mortgage.
Either way pay off as much as you can now if its affordable as one day those rates will start going up - so if you clear lots off now even if rates do go up it will not matter a much as it will be a higher % on a lower £k.
Mortgage free go on you can do it.
Either way pay off as much as you can now if its affordable as one day those rates will start going up - so if you clear lots off now even if rates do go up it will not matter a much as it will be a higher % on a lower £k.
Mortgage free go on you can do it.
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