Mortgage - 1.99% For 5 Years or 2.89% for 10?
Discussion
Those are my options.
I just about remember the very high rates of the 1980s. I'm leaning towards the 10 year fix for stability, but if HSBC see fit to offer a 1.99% fix for 5 years they must be pretty confident about the direction of the base rate over the next 5 years?
My repayments are affordable on both, but I would pay a lot less interest over the 5 year fix so it really comes down to what rates will do from years 5 to 10 doesn't it?
Any help much appreciated.
I just about remember the very high rates of the 1980s. I'm leaning towards the 10 year fix for stability, but if HSBC see fit to offer a 1.99% fix for 5 years they must be pretty confident about the direction of the base rate over the next 5 years?
My repayments are affordable on both, but I would pay a lot less interest over the 5 year fix so it really comes down to what rates will do from years 5 to 10 doesn't it?
Any help much appreciated.
Tbh if it was me I'd go for the 10 year at that rate, but we are all different as are our needs and wants......
Edited to add, I was a mortgage borrower during the 80's and the thought of repeating having to go around the supermarket counting every penny when you had 2 young children at home being looked after by my 'stay at home' wife and not earning. Also if I recall the married mans tax allowance was removed, stressful times to say the least.
It is not something I would like to repeat or wish upon anyone....
Edited to add, I was a mortgage borrower during the 80's and the thought of repeating having to go around the supermarket counting every penny when you had 2 young children at home being looked after by my 'stay at home' wife and not earning. Also if I recall the married mans tax allowance was removed, stressful times to say the least.
It is not something I would like to repeat or wish upon anyone....
Edited by HarryW on Saturday 18th April 19:38
Calculate the sums for the debt you have over the timescales - have to say the 10 year looks great only thing with HSBC is the amount they lend you is stupidly low if you have dependants.
I went for a remortgage quote from them recently and they only offered to lend my 1/3rd of my prevailing debt as computer said no.... Bizarre. So it might be a rate purely for attention rather than actually accessability
I went for a remortgage quote from them recently and they only offered to lend my 1/3rd of my prevailing debt as computer said no.... Bizarre. So it might be a rate purely for attention rather than actually accessability
Is there an echo in here?
I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
minimods said:
Is there an echo in here?
I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
The move overseas sure that's maybe am issue but if you came into some money you'd do the maths cost to pay off early v internet you'd earn on the lump sum. End of the day you can simply let it run if you wish. I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
Question is for 10years it's a fixed low apr. could you get it less? Maybe but how much less
minimods said:
Is there an echo in here?
I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
Damn iPhone double posting. I can't delete it now either. I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
I share your views, but I've never lived anywhere for more than 5 years, so would be keen on locking myself down for 10 years.
Craikeybaby said:
minimods said:
Is there an echo in here?
I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
Damn iPhone double posting. I can't delete it now either. I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
I share your views, but I've never lived anywhere for more than 5 years, so would be keen on locking myself down for 10 years.
Welshbeef said:
Craikeybaby said:
minimods said:
Is there an echo in here?
I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
Damn iPhone double posting. I can't delete it now either. I think 10 years is an awfully long time for a mortgage. Look at the redemption charge if you want to change it later, for example if you move abroad or come into a lump sum and want to pay it off. I would probably go for the 5 year and pay the same as the 10 year in overpayments. Interest rates will probably rise in 5 years but who knows?
I share your views, but I've never lived anywhere for more than 5 years, so would be keen on locking myself down for 10 years.
What is the rate once the 5 year ends? Of course you can go elsewhere, but that's the one you'd be offered by HSBC. I think it's 1.5 over base rate at the moment.
If it were me I'd take the 10 and overpay the 20% that you can. Actually either way I'd sign up and overpay by 20%.. Less pain when you drop out of the fixed rate, whatever happens to the base rate.
If it were me I'd take the 10 and overpay the 20% that you can. Actually either way I'd sign up and overpay by 20%.. Less pain when you drop out of the fixed rate, whatever happens to the base rate.
I'm pretty sure that the mortgage is portable, but I'll confirm later today. I've moved a fair bit in the past and it was all with the aim to eventually get where I want to be. I've achieved that now and, although I'd never rule out another house move over the mortgage period, it isn't the plan at the moment.
The lender, First Direct, have been pretty thorough with my outgoings, but at the moment the amount they've agreed to lend is within £20k of my top budget. Hopefully that will increase to roughly match it with further clarification of the 'fixed' elements of my pay.
I really like the idea of knowing my mortgage payments over the next 10 years, especially with a fixed rate of 2.89%, but 1.99% over 5 years isn't easy to dismiss. I'm leaning towards the 10 year deal as it's more of a known known whereas the 5 year deal has an element of the known unknown.
The lender, First Direct, have been pretty thorough with my outgoings, but at the moment the amount they've agreed to lend is within £20k of my top budget. Hopefully that will increase to roughly match it with further clarification of the 'fixed' elements of my pay.
I really like the idea of knowing my mortgage payments over the next 10 years, especially with a fixed rate of 2.89%, but 1.99% over 5 years isn't easy to dismiss. I'm leaning towards the 10 year deal as it's more of a known known whereas the 5 year deal has an element of the known unknown.
Gassing Station | Finance | Top of Page | What's New | My Stuff