Please help with some mortgage advice..

[poptosis]

Time has come to remortgage after a two year fixed rate. This was my first mortgage; it was nice to know each month what I was paying out and after two years the interest rates are not massively different.

My question is what period of fixed term would you choose if the rates were exactly the same for 2,3 and 5 year products? I guess I am really asking wether interest rates are likely to rise, fall or stay the same over these periods. Some products are fixed at about 6% for 20 years at the moment which suggests that the mortgage companies are guessing that interest rates are only going to go down over this period.

I am not intending to move in the next few years.

Any thoughts from those with access to crystal ball or who are just up on these things would be massively appreciated.

regards,

pop

[wiggy001]

poptosis said:

Time has come to remortgage after a two year fixed rate. This was my first mortgage; it was nice to know each month what I was paying out and after two years the interest rates are not massively different. My question is what period of fixed term would you choose if the rates were exactly the same for 2,3 and 5 year products? I guess I am really asking wether interest rates are likely to rise, fall or stay the same over these periods. Some products are fixed at about 6% for 20 years at the moment which suggests that the mortgage companies are guessing that interest rates are only going to go down over this period. I am not intending to move in the next few years. Any thoughts from those with access to crystal ball or who are just up on these things would be massively appreciated. regards, pop

Not an FA of any kind at all, so this is just my opinion (as someone who is looking to move in the immediate future and is looking at mortgage deals).

Simple fact is, the longer the fixed period, the longer you are tied to that lender (unless you want to pay to get out!), so think very hard about how long you want to stay put (or ensure the mortgage is portable).

Personally, I'm looking for the best deal fixed for the next 3 years (I like the security of knowing what I'll pay each month) that won't sting me for more than 2% if I redeem early (as you never know when you might want to change). It will also need to be portable...

I certainly wouldn't want to be tied into a mortgage deal for anything like 20 years...

Just my opinion

[minimax]

anonymous said:

[redacted]

what, me sir? I happen to be able to proudly display the 'I' on my card

I don't mind dishing out a bit of advice either, although I might insist on a pint as payment

[minimax]

poptosis said:

My question is what period of fixed term would you choose if the rates were exactly the same for 2,3 and 5 year products?

I am massively over-simplifying here, but fixed rates generally get more expensive the longer they run for. this is because the gamble for the lender is more risky. to answer the question, if they are all the same then go for the 5 yr deal, but the caveat (and it's a biggy) is to remember that this means that all the lender has done is averaged out the 2 & 5 yr rates to come up with a figure that makes it easier to sell. it is a marketing trick.

I must advise you to seek independent mortgage advice. this is not a plug (this time ). think about it this way. when you buy a family car do you look at just ford or do you look around to see who's got the best model? and then do you take the dealer finance or look around to see who provides the best loan or finance?

p.s, you aren't talking about a certain bank based in the N.E that sponsors newcastle utd are you?

also, do check that they are actually independent, legally, it's can be a grey area. I can give you the criteria to check against if you wish

[poptosis]

Mini YHM.

[fido]

i reckon the 2yr option gives you best flexibility; personally i don't think interest rates will go past 5% anyway ... may even stick at 4.75% ... though it's a tough call at the moment.

as said before, long-term fixed rate mortgages are not popular here (as they are in the US), and you will pay an exponential premium for the protection.

just moved to an offset flexible mortgage myself and it's paying off already... which is just as well as i've just ed my car

/disclaimer: i'm not a financial adviser work, but i do work in the city.

>> Edited by fido on Wednesday 23 February 21:39

[poptosis]

minimax said:

p.s, you aren't talking about a certain bank based in the N.E that sponsors newcastle utd are you?

No, they sponsor the entire league

Thanks for the advice mate,

Regards