Fixed Rate Mortgage Ending - Fix again ?

[SwankBaton]

Whats the general wisdom with the current economic climate , interest rates, cost of living "crisis"


Leaning towards fixing (again) but only because I've not lived through any serious base rate increases since being a home owner.

Fix for 2,3.. 5 ?

Only £20 difference per month between 2 and 5 years, Not sure I've seen it that close before.

Should I be interpreting that spread as signs the lender (Nationwide) think the market is going in a particular direction ?


Edit - Adding some info should it be relevant

LTV : 70%
2 yr Fixed : 2.64
3 yr : 2.64
5 yr : 2.74
10 yr : 2.74

Edited by swankBaton on Friday 10th June 13:02

[heisthegaffer]

In my opinion it is a no brainer, there is surely only one way the interest rates are going?

We're hoping to complete on a new gaff soon so have fixed for 10 years - no difference between 5 or 10 so ideal.

Good luck.

[ecs0set]

In the process of remortgaging at the moment. 2.31% from Lloyds (I think no longer available) for 10 years. You'd be a brave man to bet for interest rates to stay lower than that.

[DodgyGeezer]

in my VERY non-professional opinion:

fixfixfixityfix

Our mortgage is nearly done but if I had to I'd be looking at a 5/10 year with all the st that seems to be cropping up (obvious caveat being the rate demanded)

[vulture1]

Im a year and a half out and was considering taking the hit for an early repayment charge just to get into a longer fix.

[Jag_NE]

My non expert view is that this choice is a punt for the vast majority of us, the bankers will be several steps ahead and already priced in where they think things will go.
At the same time, for 20 quid a month, it feels like great value and you can’t win or lose too badly either way.
I’d take the 5 in your shoes.

[jamgy]

vulture1 said:

Im a year and a half out and was considering taking the hit for an early repayment charge just to get into a longer fix.

I did exactly that in November to go from 2.7% to 1.4% 5 year fixed. The increase in house values in the interim helped us as it pushed us down another LTV bracket. The ERC has been paid for by the saving in interest over what was left on our original fixed term.

A couple of months ago we locked in some additional borrowing for house works at 1.8% 5 year fixed. We'd be looking at 2.45% now. Only heading one way...

[SwankBaton]

Thanks for the replies

Jag_NE said:

My non expert view is that this choice is a punt for the vast majority of us, the bankers will be several steps ahead and already priced in where they think things will go.
At the same time, for 20 quid a month, it feels like great value and you can’t win or lose too badly either way.
I’d take the 5 in your shoes.

Out of interest, why would you choose the 5 over the 10?
Is that to consider the lower LTV yielding better offers in 5 years time ?

Some quick calcs , assuming same increase in house prices (estimates) as the past 5 years would have me at LTV 50% in 5 years time , 33% in 10 years....

Edited by swankBaton on Friday 10th June 15:43

[supersport]

swankBaton said:

Thanks for the replies

Jag_NE said:

My non expert view is that this choice is a punt for the vast majority of us, the bankers will be several steps ahead and already priced in where they think things will go.
At the same time, for 20 quid a month, it feels like great value and you can’t win or lose too badly either way.
I’d take the 5 in your shoes.

Out of interest, why would you choose the 5 over the 10?
Is that to consider the lower LTV yielding better offers in 5 years time ?

Some quick calcs , assuming same increase in house prices (estimates) as the past 5 years would have me at LTV 50% in 5 years time , 33% in 10 years....

Edited by swankBaton on Friday 10th June 15:43

10 years is an awfully long time to tie yourself in. Who knows where your life will be in 10 years and tha could mean paying penalties that outway the benefits of such a long fix.

[Part_boiled]

supersport said:

10 years is an awfully long time to tie yourself in. Who knows where your life will be in 10 years and tha could mean paying penalties that outway the benefits of such a long fix.

Agreed, 10 years is a long time. I bought my first home in 2006 (103k for a small 2 up 2 down end terrace, previously bought in 2003 for 76k, huge property inflation at the time) 2 years later the housing market collapsed and I was fixed into a 5.25% fixed term 10yr mortgage with astronomical early release fees. 10 years out of contract this dropped to 2.3%

I moved house a year later and sold for 97K, I have calculated the huge amount of money lost due to my own naivety at the time. In a new house I've recently re-mortgaged for 5yrs at 1.92% I can only imagine its getting worse for a while. But 10 years again scared me

[DodgyGeezer]

supersport said:

10 years is an awfully long time to tie yourself in. Who knows where your life will be in 10 years and tha could mean paying penalties that outway the benefits of such a long fix.

to be fair I should have said that in all longer term cases ensure that the mortgage is portable!!