Mortgage deal ending

[denislawsbackheel]

I'm now eligible to take a new deal as less than 6 months until the end of my fix.
My mortgage is in 2 parts with 1 part ending in 6 months and the other about a year later.
Available options for the part up in 6 months:

2 year fix - 4.75%
5 year fix - 4.49%
10 year fix - 4.95%

Which would people recommend?

I’d do the 5 year deal.

 

[Citizen of Legoland]

I'm now eligible to take a new deal as less than 6 months until the end of my fix.
My mortgage is in 2 parts with 1 part ending in 6 months and the other about a year later.
Available options for the part up in 6 months:

2 year fix - 4.75%
5 year fix - 4.49%
10 year fix - 4.95%

Which would people recommend?

Not enough info to decide. Can you make overpayments without incurring a penalty? How do you foresee your earnings potential over the period of the mortgage? How much to leave the arrangement?

I think it’ll be at least 5 years before we see sub 3% rates again, personal opinion, so being stuck on a 10 year rate at 5% might not be too bad, especially if you can offset interest with overpayments. Always a gamble though. Probably the 5year fix if you envisage having no opportunity to make overpayments and just want peace of mind.

 

[Gorton_Tubster]

If it was me it would be two years fixed to give more options.

 

[Gareth Barry Conlon]

Current rate predictions are:

"Financial markets currently price in a 78% chance that the BoE will raise rates by half a percentage point to 3.5% on Dec. 15, and a 22% chance of a rise to 3.75%."

This is priced in to the quote you have. If you wait until after the Dec 15 decision and the lower rise does happen then you will possibly get a few bips in your favour. The big mover in financial markets right now is the oil price which is dropping significantly. That should also work in favour of a lower price/inflation/rate outlook. 6 month oil price below.

Wile the above may look great - there is a mass of data out there and who knows what can happen tomorrow so dont expect mortgage rates to jump significantly. Even with continued great economic data the quotes you get on your mortgage will not alter dramatically. Only a hapless tory can change rates dramatically and not in a good way and even they are not stupid enough to do that again.

 

[Corky]

2-year variable - live a little :)

As Lego has said there isn't near enough information.

 

[117 M34]

Thanks everyone.
Pretty unanimous with the 5 years, which is what I was thinking so will go with that.

 

[blue44]

Probably the 5year fix if you envisage having no opportunity to make overpayments and just want peace of mind.

excuse my ignorance with this,
I'm on a 10 year fixed ,on our 4th year now and we could overpay 10% without a penalty,from my reckoning,if we did over pay,it just brings the mortgage final payments closer,but you still roughly pay the same amount ,i know the overpayment eats into the interest but like i say,you still pay the same ammount of money either way.

 

[LangleyBlue1970]

My current deal ends a year from now. My current fixed, and very affordable energy deal ends this coming April.

I suspect that this time next year I will be living a very different life to the one I’m living now, financially speaking.

 

[denislawsbackheel]

excuse my ignorance with this,
I'm on a 10 year fixed ,on our 4th year now and we could overpay 10% without a penalty,from my reckoning,if we did over pay,it just brings the mortgage final payments closer,but you still roughly pay the same amount ,i know the overpayment eats into the interest but like i say,you still pay the same ammount of money either way.

Surely not.
If you overpay isn’t the overpayment taken off the outstanding balance, thus the total amount of interest paid on the loan over the term will be reduced.

 

[blue44]

Surely not.
If you overpay isn’t the overpayment taken off the outstanding balance, thus the total amount of interest paid on the loan over the term will be reduced.

yes it is as far as i know,
but like i said from my calculations you still.pay roughly the same ,but obviously pay it off sooner,i cant get my head around it,i thought last year to.start paying the 10% overpayment ( luckily we could.afford to.do.this) but thought why bother.