We are remortgaging and the bank are offering a 5 year and 10 year fixed option. The 10 year option is a little bit more every month but that doesn’t bother me too much, I’m not keen on the idea of being tied in for 10 years. We’ve only just got the details through so still have to sit down and look at them properly but I’m guessing that there might be considerable fees to come out early etc. We got our house through a homestake scheme so we’re going from 80% to 100% ownership and our current mortgage provider is our only option.

Interest rates are only going one way just now. However that said. Once the economy starts to go into recession (depression) the rates will likely come down again. That said. Think over the past 300 years the average interest rate is 7%.
Longer would give you more piece of mind if that’s what you want and you know exactly the costs.

Just fixing mine for 5 years, it’ll give me an incentive to pay it all off.

I fixed for 10 years at 3.1% in 2015. Interest rates had been at historical lows for years, and I figured they could only go up from there.

Which was true, but what I hadn’t expected was quite how long they would stay at near zero!

However, I am more relaxed about the current cost of living crisis than I would have been on a short fix. It will ultimately still cost more overall, but I don’t really regret it. Saving me from that stress is worth some ££.

I never fixed in my +20 years of mortgages across various house, always went with the standard rate until tracker mortgages arrived in the mid 2000’s, which I took as I saw it as nothing different to what we’d been doing – although as it turned out, pure luck we did 🙂

I just saw fixing as betting TBH.

I’m guessing though that fixing comes with ‘restrictions/costs’ – are you comfortable that these are manageable (if your circumstances change)?

Worth bearing in mind that if you can make overpayments within your arrangement meant you’ll lower the cost of the interest – which might make the 10 year more attractive.

I had a similar dilemma…
Opted for a 5 year fixed as may be able to remortgage again in 5 years, WITHOUT the early repayment fee…
THe 10 year was the same rate, but I’ve taken a gamble on being able to remortgage with a lower borrwing sum in 5-7 years…

DrP

what are the rates? if they’re bad (due to it being a shared ownership thing? but you’re locked in) and you’re not locked in next time, consider fixing for less time then you can re-mortgage to a different provider with access to full market rates?

One thing I’ve found is that with each re-mortgage as the LTV has reduced and the interest rate has been low we have got a better rate after each fixed period (perhaps just a benefit of base rate??). I think we fixed for 3 years again this time (maybe 5, I should really pay more attention).

I prefer the consistent repayment amount which also allows to me overpay and reduce my term.

It is a bit of a gamble, and I perhaps not a wise gambler.

With the 10 year are you able to transfer it if you decide to move, a lot can change in 10 years?

One thing I’ve found is that with each re-mortgage as the LTV has reduced and the interest rate has been low we have got a better rate after each fixed period

The lower the LTV, the lower the rate (down to 60%)

It can be beneficial to fixed it until you reach the next LTV threshold, rather than as long as possible to reduce the rate.

Personally I wouldnt fix for 10 years, unless you can exit with out fees, as life can change dramatically over that period of time.

our fixed rate mortgage is coming to end so we aer going with another 5 year fixed. Think its at 2.64%.

Previous one was something like 1.7%.

So despite paying the mortgage off over 5 years, my new rate is £50 more than previous. God bless interest rates. i try not to think about it… as it makes me angry/sad/depressed.

I’m still keen on a tracker and yes interest rates are moving northwards but still historically low. (5/6% was pretty average in 2000-2009.)

Recession/slowing economy will likely make the idiots at the MPC see sense at some point.

However, we are in unchartered water – we could be at the start of a boom/bust cycle or it could be much worse and heading in a tricky direction due to economic upheaval.

People tend to leverage more with super-low interest rates which can cause an absolute disaster when they go up.

Do whatever works best for you. a lot of this kind of decision is based on your personal situation and attitude to risk.

Check the small print, do they allow you an overpayment? When we last fixed ours about 3 years ago it got cheaper but I opted for a voluntary overpayment and kept the repayment the same. My thinking was that we were happy with the repayment amount, it reduces the capital amount fractionally quicker and it shields us a bit if rates get worse next time as we can drop the overpayment.
If you don’t mind paying the 10yr rate on a 5yr fixed then you could pay off the capital a bit sooner.

Early repayment in full is also likely to be on a sliding scale so you may be able to fix for 10 but the early repayment fee is only for the first 5. It’s another ‘read the small print’ kinda thing.

Worth bearing in mind that if you can make overpayments within your arrangement meant you’ll lower the cost of the interest – which might make the 10 year more attractive.

Definitely agree with this. We remortgaged just before brexit on a 7 year fixed, partly because we didn’t have a good deal at the time, and partly for peace of mind, but the ability to overpay softens the higher interest rate you pay (at the moment).

If you are not planning on moving and do think you’ll need to re-mortgage in that time to release more equity (yes you could do a second charge but interest rates are a bit higher on them) then go 10 year.

Just be mindful of any ERCs you may face.

Some good points here

https://www.theguardian.com/money/2022/jun/18/10-year-fixed-rate-uk-mortgages-value-loans-deals