To 10 year fix (mortgage)?

[DanTheMan]

Currently nearing the end of our fix deal and looking at the available options. We're just under 60% LTV and it looks like the base rate increase has already taken effect, with rates on the up.

We owe around 150k so anything with product fees of £999 don't make much sense, as the overall cost is higher on most deals. We're looking for deals without fees, unless the maths works out.

There's a few deals for ~2.35% for 10 years and I'm considering them. I can't see rates getting any lower than they currently, however 10 years is a long time. The cheapest 2 year fix seems to be 1.91% but all indications point towards rates being higher in 2 years. 5 year fixes seems to be closer to 10 year rates than 2 year rates.

It's tempting to know exactly where we stand for the next decade but it seems like a big commitment.

We'll be in this house in 10 years, so early repayment fees aren't an issue. We also won't be looking to do any further borrowing on the mortgage.

Any thoughts?

 

[DanTheMan]

Thanks for the input all.

Started an application for a 10 year fix with Lloyds, 1.86%, £999 fee. I'm a little apprehensive but realistically, am I going to get an average of 1.86% on 2/5 year variables with the way interest rates and the economy is heading? Probably not. It also feels nice to know exactly where we stand with the mortgage for the next decade.

Paying the fee works out cheaper when it comes to a 10 year fix for us, whereas when looking at 2/5 year fixes, it was always more expensive to pay a fee.

 

[DanTheMan]

Doing the maths, if we could somehow guarantee 1.15% over the next ten years, it would 'only' be £50 cheaper per month. Realistically, 1.3% was about the cheapest I ever saw with our LTV.

1.86% is a figure that suits us and seems fair when it comes hedging against future rises. The erc shouldn't ever matter as our daughter is at school here for the next 7 years and we bought this due to location and long term career / life plans.

 

[DanTheMan]

I recently re-mortgaged and was tempted by a 10 year, but fixed for 5 instead at 1.34%. Rates will no doubt have gone up by then - possibly considerably - but I'd prefer the flexibility and option to take out equity at that point to re-invest elsewhere.

Can I ask where you got 1.34% for 5 years from? That's a great deal if the fees aren't extortionate.

 

[DanTheMan]

Yeap, i have an ERC of 2% that reduces to 1% in May, but if i have the appointment to plan for the new product in April i would be charged 2% even though the new product wouldnt start until May...logic fail. Lloyds getting a phone call tomorrow.

Wow that's poor form from them.

Our ERC is 2% until April but as we're moving lender and Halifax won't get notified of our intention to repay until then, it shouldn't be an issue. I'll be very annoyed if they try to charge us the ERC from when the application began.

 

[DanTheMan]

Well. Glad I managed to get my mortgage sorted last week. Lloyd's rate has now jumped from 1.93 to. 2.33

0.4pc

That would be 50ppm*60months on my 5 year fix.
3k.

Considering my ERC was 2k. Already happy I fixed now.

To avoid the ERC I'd have had to wait until September. I'm sure it will be higher by then

Also very glad I got the ball rolling before the rate increase. It would have cost and extra ~£2700 in interest over the 10 years.

Interesting that some of the comparison sites don't seem to have updated with the new rates, as they are still showing 1.83% for Lloyds.

I've also just opened a club Lloyds account as the £750 cash back offer is still showing on the website. I don't know what steps need to be done to get the cash back, however we're not moving the mortgage until 2nd April, so hopefully we will get it.