Mortgage Rate Rises

[GeorgeStorm]

We're currently on a 5 year 2.8% running out next september with around £95k left, but are looking to potentially move later this year and trying to have a think about how much bigger we want to go mortgage wise, will now be buying with my wife so in theory could probably get £400k+ (house income ~£90k at the moment) but with the combination of it being a higher rate as well as being much larger that would be a crazy jump in payments and so we're thinking of staying well away from our limit, but wondering what do most people tend to think a good approach is at the moment regarding length of term etc, go for another 5 year if possible or look to shorten with the hopes the rates may come down a bit?

 

[fez]

We're currently on a 5 year 2.8% running out next september with around £95k left, but are looking to potentially move later this year and trying to have a think about how much bigger we want to go mortgage wise, will now be buying with my wife so in theory could probably get £400k+ (house income ~£90k at the moment) but with the combination of it being a higher rate as well as being much larger that would be a crazy jump in payments and so we're thinking of staying well away from our limit, but wondering what do most people tend to think a good approach is at the moment regarding length of term etc, go for another 5 year if possible or look to shorten with the hopes the rates may come down a bit?

I would simply make yourself comfortable when it comes to term length. We should really have gone for a much shorter term than we did as we have hit the max overpayment each year on our current mortgage. If we had a much shorter term, the base amount we would have had to pay would have been much closer to the overpayment amount we have been putting in, allowing us higher repayments. Well, either that or get one that doesn't have an overpayment limit.

And as for locking in? No idea. Do you value certainty or potentially saving a few quid. The world is in a very precarious place right now with Mr Trump at the helm. Could go either way but it wouldn't surprise me if something drastic happened that caused them to shoot up again.

Our next mortgage will likely be 3-5 years depending on the rate at the time. If we can get under 4% we will likely lock in for 5 years. If its much more than that, likely 3.