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Mortgage advice required, how long to fix?

dipteshr Avatar
2y, 1m agoPosted 2 years, 1 month ago
Hi all,

Can anyone advise or share thoughts on how long they feel is best value to fix a mortgage for?

2, 3, 4 or 5 years?

Thanks :)
dipteshr Avatar
2y, 1m agoPosted 2 years, 1 month ago
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#2
Below table gives you an idea of how the market perceives the risk of rate changes - not quickly upwards.
Always a risk to fix, always a risk to keep a floating rate - there is no right answer - its a punt on future change in available rates.

Swap rates enable lenders to secure fixed prices for funding over specific time periods (usually from 1 to 10 years), which are used to create fixed rate mortgage products for commercial and residential property investors.

SWAP % 01/12/2014
1 Year 0.65
2 Year 0.95
3 Year 1.16
5 Year 1.49
7 Year 1.73
10 Yr 1.99
#3
Whether you want to risk a short term fix and there being no attractive rate in the future depends on your ability to repay ... how much risk are you able to take, based on the affordability of your debt.

You can get your broker/mortgage lender to provide a scenario under different future rates after your fix ends to give you an idea of how much risk you are shouldering under different conditions. No right answer, cannot precisely predict what future rates will be.
#4
I would like to see 25 year fixed rate mortgages introduced so people can know where they stand long term and can plan ahead. Many people can take out a 5 year fixed rate and through no fault of their own interest rates rise so that they can no longer afford the new rate. Our economy seems to be based on the short term and no long term planning.
#5
As above if you want peace of mind then fix for as long as you can knowing you can afford the mortgage at the current interest rate. We are repeatedly told interest rates will rise with the latest prediction either April or June 2015.

I believe the 9 Bank Of England committee members voted 7-2 to keep interest rates as they are at last months meeting.

Japan has gone into recession, also with France and Germany struggling we are still in uncertain times.
#6
donaldduck2
I would like to see 25 year fixed rate mortgages introduced so people can know where they stand long term and can plan ahead. Many people can take out a 5 year fixed rate and through no fault of their own interest rates rise so that they can no longer afford the new rate. Our economy seems to be based on the short term and no long term planning.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10594494/Why-Britons-cant-have-40-year-fixed-rate-mortgages.html
#7
depends on what the offer rates are and what your views on risks are.
#8
There is no right answer - bear in mind interest rates can only go up from here - but when and by how much is anyone's guess (if I could tell you that for certain I'd have a few million to my name ) . Best way to look at it is what you can afford now and could you take say a 2% rise in the next couple of years ? - Seemed a certainty a few months ago but not so certain now . A fixed rate will be more expensive in the short term ,but would give you the certainty of payments over the term of your fix . Do the sums and decide - No one can be sure which way rates are heading -or when .
#9
as rogparki said.. no right answer. it is down to how much you would be able to afford if there was an increase

Edited By: Otto.uk on Dec 03, 2014 19:30

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