Question
I’m remortgaging in September and having always opted for five-year fixed rates when interest rates have been low, I am now considering a two-year fixed rate. My rationale is that by only locking in for two years I will have some flexibility if rates fall.
I’d be grateful for advice on the pros and cons of this option. Are rates cheaper for five-year deals? I am conscious of also keeping repayments down as much as possible. Thank you.
Answer
Yes, currently five-year fixed rates are cheaper than the two-year fixed options. Currently it is unclear as to when or if rates will come back down.
A two-year fixed option will cost more however if rates do decrease in the next few years, you can take advantage of a lower fixed rate sooner.
To keep your monthly payment as low as possible, depending on your age and taking into account retirement age etc, you could look to increase your mortgage term to bring your monthly costs down.
However please consider doing this with caution and try to keep your term ending within your anticipated retirement age.
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Meet our expert
Introducing Joe Capon of The Mortgage Bubble, who is ready to answer your questions…
Joe Capon has more than 10 years’ experience in the mortgage industry. He set up The Mortgage Bubble in 2021 and it is now a multi-award-winning mortgage firm, which strives to deliver the best mortgage advice to its clients which meets their needs now and also in the future.
Q: Hi Joe, welcome to the What Mortgage Team! How do you feel about being our new mortgage expert and answering our readers’ questions?
A: It’s great to be given the opportunity to provide your readers with accurate and up-to-date information about mortgages and answer any questions your readers have on the topic.
Q: How long have you been a mortgage broker and what’s your specialist area?
A: I have been a mortgage broker for the past 10 years. The Mortgage Bubble specialises in a few different areas – we help first-time buyers, current home owners and property investors.
Q: Why do you think it’s so important for people to get good mortgage advice?
A: Receiving mortgage advice is so vital to buying and or owning a property. Not only will a mortgage adviser potentially save you money now, they can foresee any pitfalls ahead. Spotting these will help save you money in the future. They also provide bespoke advice to fit your circumstances and goals.
Q: What does a typical day in the life of a mortgage broker involve?
A: Apart from liaising with clients and providing them with bespoke mortgage advice, we also speak with banks, building societies, solicitors and estate agents.
Q: What’s the best thing about being a mortgage broker?
A: Steering a client through to completion either on their first property, new dream home or their first or additional investment property when they thought it wasn’t possible. There’s no better feeling in the job!
Q: What do you do when you are not helping people with their mortgages?
A: In my spare time, my two sons keep me very busy with schools runs, after school clubs and sports at the weekend. Of recent times I have got into triathlon, and training for three different sports can be time consuming.
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If you have a question about your mortgage, which you would like Joe to answer, send it to our editor, Kate Saines at kate.saines@emap.com
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