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How long to fix Mortgage for ?

16K views 33 replies 23 participants last post by  mwad 
#1 ·
Wanting some advice on how long to fix a buy to let Mortgage for:
My 2 year fixed is expiring next month and wondered what everyone thought on how long to fix the next one. With the current trends are mortgage rates increasing ? Is it wise to lock for 5 years?

Thanks
 
#4 ·
I have just remortgaged my house and our BTL and fixed them both for as long as I could (5.years and 3 years respectively) to ensure Ii know exactly what my payments will be for as long as possible.

As bigalc mentions, I am able to overpay on both should I have some spare cash which is a great option
 
#6 ·
Unless you have a crystal ball, there is no right or wrong answer.

If you had told people in 2009 that that base rates would be 0.5% for the next nine years, people would have said that you were nuts.


Base rates could be 0.5% for the next 10 years. They could be 5% in two years time. No one knows, if they did they would be very, very rich ;)

The market projects rates into the future, but that is all they are, just projections, and those projections change as the future draws nearer.

It all depends on your attitude to risk. If you want low risk then fix for a long time. If rates then rise then you chose well, if rates remain very low or fall, then you chose badly.
 
#8 ·
Another consideration is whether you want to move. Fixing your mortgage for 5yrs, but then moving in 2 means either sticking with the same provider (which may be less competitive) or paying hefty early repayment fees to switch.

I’m constantly looking to move so stick to 2yr fixed rates....
 
#9 · (Edited)
IMHO the next few years are likely to be quite volatile as far as the financial markets are concerned.

As has been mentioned it's all about your attitude to risk.

You could go for a couple of years and find that things are substantially worse and wish you'd gone for 5 or the other way around.

Good luck with your choice (from one who went through the double figure interest rates and the "have an endowment it'll easily pay off your mortgage" fiasco).

All the best.

Andy.
 
#12 ·
As well as factoring in whats said above, accommodate for the cost of remortgaging every couple of years. Booking fees, valuation fees, mortgage broker fees, legal fees can easily add £1-2000 on top of your new mortgage. Pay that at year 0, 2 and 4 and that could easily be more expensive then a 5 year deal.
 
#14 ·
I’d be fixing for as long as possible, my worry isn’t interest rates, it’s the value of USD and it’s impact on £ that worries me. I’d rather have fixed costs for a longer time in case of hyperinflation. I work in finance and sadly it’s also my hobby along with detailing, we live in worrying times.
 
#17 ·
For me, the most important thing would be is how quickly I could pay off a mortgage. Therefore I would look for the lowest penalties and the least limitations of regular over-payments, to the maximum I could manage. This can be hindered by a fixed mortgage.

In 2008 I was on a fixed mortgage. Whilst I was overpaying, it was restricted to how much. However once that fixed term ended I could overpay as much as I wanted without penalty.
 
#25 ·
We just fixed for another 2 years. Could have fixed for 5 and did look at it. However the difference in cost naturally was better for the 2 year and the base rate will have to jump a fair bit for it to have been the wrong choice. Plus we’re looking to move in 2 or 3 years so didn’t want to be stuck with one provider or pay hefty repayment fees.
 
#27 ·
I looked into what over payments I could make , and the £100 I'm paying is no where near what I could pay. Felt abit gutted at the time but least it's something and better than nothing.

QUOTE=pxr5;5468014]For me, the most important thing would be is how quickly I could pay off a mortgage. Therefore I would look for the lowest penalties and the least limitations of regular over-payments, to the maximum I could manage. This can be hindered by a fixed mortgage.

In 2008 I was on a fixed mortgage. Whilst I was overpaying, it was restricted to how much. However once that fixed term ended I could overpay as much as I wanted without penalty.[/QUOTE]
 
#28 ·
Just check what your rate will be when the fixed rate expires. My 3 year fixed 4.6% came to an end 8 years ago, just when we hit the recession. I panicked till I spoke to them. My ‘variable’ rate was then going to be 0.5% above base rate. At the time base rate was 0.5% so my mortgage actually dropped by £300 a month. Each time they increase rates at Bank of England it makes £15 difference as they are doing it so slowly.

With about 10 yrs left, I won’t be going fixed rate any time soon!
 
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