Any Financial Wizards out there???

Buying a house and have two possible mortgages to go with:

Fixed for 2years -£700/month

Fixed for 5years -£715/month

I know that £15 int much difference but we will be needing as much cash as possible, so the question is what do we think interest rates will be like in 2 / 5 years time.

Doing my feckin head in! (banghead)

 

I think rates have been pretty stable for a while now. Is there any tie in beyond the fixed rate period with either of them? Personally, I'd go for the 2 year one if there's no early redemtion penalty beyond the 2 years but that all depends on whether you'd want to put yourself through it again in 2 years time to look for another deal.

 

No wizard

but its certainly likely rates will rise in the short term. </p>

http://www.rbs.com/content/media_centre/rbs_and_the_economy/downloads/uk/forecast.pdf</p>

If you are comfortable with the fixed rate and the get out clauses aint too bad then go for it.</p>

 

I guess if you need as much cash as possible early on, and that £15 a month will really make a great deal of difference to you, then you go for the 2 year one if you believe that your finances will be better off in 2 years just in case it goes up.

Only you can decide how you do it.

I had fixed rate for ages, at the time they were dropping (you do benefit with the next one being a big drop in that case) and when I decided not to bother with a fixed rate anymore they started going up! Oh well!

 

Well we don't mind the hassle if its worth it! If we decided to change lenders at the end of the term in both cases we would pay the same fee. Only thing maybe swinging it for us is that there is always a chance we might sell up and **** off and committing for five years and then doing that would cost us, so the 2year one would be better in that case. It's all ifs and buts innit really?

 

Cheers lads, much obliged.