Current deal (5 yr fixed) expires in a couple of months so as of now, we can jump to a new deal.

Current provider (Santander) are offering several options including A 2 yr fixed (1.54%) And another 5 yr fixed at only 1,79%.

Quite a difference since we were paying 4%.

Might also look at the option of reducing the term given these rates.

Clearly current situation is the reasoning behind this but is this the time to jump on these rates and take advantage? Are we better off waiting another month or two – not sure that’d be a benefit tho.

I like a fixed rate but is there anything else we should consider?

One other thing! We might be looking to move within 5 years so if we take a 5 yr fixed we will pay a penalty for ending that mortgage early. If you stay with the same lender do you still pay that charge? Maybe 2 year fixed would be better …but then the rate could go back up. Why can’t it be easy! 🙂

Rates have been like that for a while. Think ours is 1.6ish (fixed December).

I wouldn’t reduce your term, but simply overpay to make the difference up (effectively reducing your term). Reason being – this gives more flexibility in case your circumstances change

Overpaying – subject to any limits in the Ts&Cs – worked well for us. Meant that as MrsMC worked more as the kids got to school, the extra was used to knock lumps off when we could and saw the mortgage paid off early (there was a canny/lucky relocation involved that helped as well, tbf)

If you stay with the same lender when you move house you should be able to “port” your existing mortgage to the new property and not pay any early redemption charges if you move within the fixed rate period.

Our fixed term from last april is about 1.5%

The general advice in the last ten years has been to fix for as long as possible as rates are so low they can’t get any lower. Then, of course, they went down a bit, then a bit more. They may still drop a bit as the base rate recently dropped, but surely they can’t go much lower! Personally I’d take the 5 year fixed. It gives you a lower figure than you are on now and 5 years of security. You can always overpay a bit to bring you up to similar levels as your current payment but I think there are better things to do with the money while rates are so low, but I appreciate some people like having the mortgage paid off.

The only way you can avoid the ERC if you refix for 5 yrs is by porting the mortgage with the same lender, so if you borrow more to move again you have 2 mortgages.

No problem in itself but means you don’t get freedom of choice on the market because once they’re out of sync it’s almost impossible to get them back in sync without a hefty variable rate period on one. I’m just doing that now and it’s going to be a bit of a ball ache.

At the moment I’d go for the 2 yr fix it your planning to move again, interest rates won’t be rising in the short term. My only concern in the fallout of all this personally is property values and bank lending – if your equity is quite low I’d probably fix longer term. I’m at 60% ltv and I’m not bothered about values generally, but if a dip wiped out a chunk of my equity and Hsbc really penalised the rates at the riskier end next year it could be quite expensive. If I was around 80% ltv I’d be fixing for 5 years because I’d really struggle to afford the repayments if I had to switch to a variable rate.

My mortgage is due end of September, because there were no fees have just applied for a low rate with another lender whos offer is valid for 6months, my current mortgage provider wont offer me a new rate until there is 4months to go. When I get the rate from my current mortgage provider Ill scan the market again and then either keep what I applied for or apply for a better rate if avail.

Could you not do the same? pick one from the two year or five year and then review closer to date and then stick or twist?

It totally depends on your circs really….
If you are moving likely to a ‘much’ more expensive property, then the long fixed term might be a pain.
If your not upgrading by a lot, then it shouldn’t

I think I would take the 5yr fixed if that was likely to work out for me, whilst people have been saying rates cant go down, they can, but not by a lot, but they can go up by a lot (probably not in the next 9-18mths) my parents were paying 14% at one point.

As above, I wouldnt reduce term (by a lot) but just over pay
That being said, I have stoped overpaying mine, and started saving instead.
I get less interest than I would save, but if/when I lose my job, having money in the bank seems like a better idea than a smaller mortgage

Thanks for the replies. Food for thought

We’re in the process of remortgaging as our current deal is up at the beginning of June. For the first time we’ve used a broker and i’m glad we did. I kind of guessed it would be tricky to get to appointments to see the Mortgage managers in Banks/Building societies and she confirmed this as lots are running with reduced staff and some are backing up mortgage paperwork as they simply don’t have the capacity to finalise the work.

In the end she recommended we stick with our current lender and do a product switch, we’ll be going onto a 5YR fixed rate at 1.74% with no fees when our current deal ends. This has enabled us to bypass the affordability check/interview and also skip valuation fees and the sort as our current lender already have the deeds to the house.
Also as this is technically not remortgaging, its product switching, we didn’t have to pay a fee to the Broker.