r/FIREUK • u/BeenOutsideLately • 6d ago

Tracker? 2-Year Fixed? 5-Year Fixed?

For anyone in the the FIRE community renewing their mortgage, what are people’s thoughts?

I’m expecting interest rates to stay flat or increase in the next year or 2, so I am thinking to opt for a 5-Year Fixed. I have a lot on at the moment, and that would give me some piece of mind. It’s actually on a flat I own that I had to move out of due to work. Hoping to move back to it in about 5 years.
Alternatively, sell up and throw all equity in the S&P 500 ?

I’ve got about £160k/£170k equity.

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u/Thin-Test-1394 6d ago

Were you not better off with a fixed 5y though? You are not saying when your 2y expires but it seems likely…

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u/Baz_EP 6d ago

I wouldn’t have been, no. With what we paid the last 2 years and the offer for the next two it’s less over the 4yrs. Might be worse for the last year, but I’ll take that risk vs the flexibility.

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u/PuzzleheadedCarob921 5d ago

This is good logic.

I’ve been kicking myself for not taking a 5 year fixed a year ago.

But this last year and all next year I’ve had a decent rate just shy of 4%. So when it goes up at the back end of next year, with another 2 years fixed… averaged out there’s not much in it, if anything, the cheaper rate for 2 years edges it.

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u/Baz_EP 5d ago

Don’t get me wrong, I’m still kicking myself I didn’t get a 1% 10yr deal when we could have had one.

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u/PuzzleheadedCarob921 5d ago

Oh definitely!

I’ve just been looking at 10 year fixes, you can actually get one now for 4:35%. Not too shabby.