[johny1980]

My 3 year fixed term is up and having done some investigation/comparisons the offers from our current lender is good- santander. We were on 5.79% !!

What I can't decide on is the new offers of 3 years at 4% or 5 years at 4.1%

Difference in payments a month is only £17 a month so I'm inclined to go for 5 years.

However, I live in a part of the country where property prices are still strong, stonehaven in north east Scotland. I am concerned that if the value of the property goes up and the reminder of the mortgages is less in 3 years I might be better of renegotiating in 3 years even if interests rates are higher?

Any advice welcome

[Piscauk]

Why not fix for 3 years, overpay (assuming you can afford to, as you are used to paying at 5.79%) for this time then come the end of the term, you'll have a greater choice of products? I wont pretend to be a financial advisor, but the economy shows little sign of making a surge over the next year or so, so 3 years time maybe the sweet spot to give yourself the greatest % equity, then look at a longer fixed term from there in case of rising interest rates.

Its probably worth looking at what % equity you will have in the house in 3 years, and just get a rough idea of if this would make any significant difference to your payments. Base it on today's rates, do the maths then makes your choice

[pandy92]

Can you not go onto the base rate?

My lender cap it at 2% about the official interest rate so i have been paying 2.5% interest for past 18 months since my 3 year fixed expired.

[Coffin]

Given that rates are anticipated to remain at their lowest possible for another year at least, I would allow your existing agreement to end, default to base rate and watch the banks like a hawk whilst also continually keeping an eye on various mortgages of your fancy

Obviously being out of terms will allow you to over pay as and when suitable and instantly change product or lender

[johny1980]

2.5% is that a low loan to value

Where just into 75% and the standard variable would be 4.24%

I think the next band for cheaper rates is 60% so unless prices rise again quite a bit I dont see us getting under that in 3 years

[dan yeates]

Surprised at this. In January I secured a 3 year fixed rate at 3.98% on a 85% LTV. Think rates have risen a fair bit recently.

[NorvernRob]

Originally Posted by johny1980

2.5% is that a low loan to value

Where just into 75% and the standard variable would be 4.24%

I think the next band for cheaper rates is 60% so unless prices rise again quite a bit I dont see us getting under that in 3 years

When a fixed rate finishes, the mortgage defaults to the official BOE rate + the lenders base rate. Because the official rate has stayed so low for so long, lenders base rates have risen considerably.

My fixed rate finished 1 month before the BOE started to drop interest rates a few years ago, I didn't sign up for a new fixed term and have now been paying 2.9% since the official rate dropped to 0.5% (around 3.5 years ago I guess?) That wasn't even that great, a lot of people went onto better rates than that.

It was pure luck that rates dropped so much just after my 3 year fixed finished. I feel for the ones that had just signed up for 5+ year fixed rates at way above what they would have been paying.

[nonumb]

Personally I'd probably 5 year fix but then my circumstances kind of require that I do, as I need the security of knowing where I stand and the 5 year fix currently would enable me to pay the mortgage even with the worst of jobs.

[montybaber]

Originally Posted by NorvernRob

When a fixed rate finishes, the mortgage defaults to the official BOE rate + the lenders base rate. Because the official rate has stayed so low for so long, lenders base rates have risen considerably.

My fixed rate finished 1 month before the BOE started to drop interest rates a few years ago, I didn't sign up for a new fixed term and have now been paying 2.9% since the official rate dropped to 0.5% (around 3.5 years ago I guess?) That wasn't even that great, a lot of people went onto better rates than that.

It was pure luck that rates dropped so much just after my 3 year fixed finished. I feel for the ones that had just signed up for 5+ year fixed rates at way above what they would have been paying.

Just like me, 5 yr fixed at nearly 7% for the last 4 yrs lol,still....least it wont be a shock when it runs out!

[shoestring25]

i like lifetime tracker morgages saves you having to pay to remortgage every few years. downside you never know how much interest rates will got up and when but as base rate has been so low for so long ive been ive been overpaying for years should be done in a couple of years after 8 years of a 25 year mortgage.