Avant rate options

Hi, I'm currently weighing up Avant fixed duration between a 4 year (2.05%) and 7 year (2.35%).

I suppose this is really a call on what ECB does and whether my future rate after a 4 year fixed period would offset and savings I make initially by going with the lower 4 year rate. I've estimated that the prevailing rate in year 5,6,7 would need to go to 2.8% to wipe out the savings I'd make years 1-4 if I went for the 4 year now rather than the 7 year rate.

Aside from predicting what ECB might do to rates in 4 years time, are there any other factors I should take into account when deciding the duration of my fixed mortgage?

Many thanks.

Are you planning on trading up in the next 4-7 years? If you are it may be beneficial to take the 4 year rate to avoid a potential break fee. However, if ECB rates rise in the next 4 years which has been well flagged, then interbank rates will likely rise over that time too which means that the potential break fee would probably be zero or close to zero. Therefore, probably best to fix for the longer term.

If not planning on trading up, then I would fix for the 7 years

smndly said:

Are you planning on trading up in the next 4-7 years? If you are it may be beneficial to take the 4 year rate to avoid a potential break fee. However, if ECB rates rise in the next 4 years which has been well flagged, then interbank rates will likely rise over that time too which means that the potential break fee would probably be zero or close to zero. Therefore, probably best to fix for the longer term.

If not planning on trading up, then I would fix for the 7 years

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Thanks for reply. Planning to stay there for the long term, so maybe a 7 year is best bet to hedge ECB rate rises

smndly said:

Are you planning on trading up in the next 4-7 years? If you are it may be beneficial to take the 4 year rate to avoid a potential break fee. However, if ECB rates rise in the next 4 years which has been well flagged, then interbank rates will likely rise over that time too which means that the potential break fee would probably be zero or close to zero. Therefore, probably best to fix for the longer term.

Click to expand...

MovingHome said:

Planning to stay there for the long term, so maybe a 7 year is best bet to hedge ECB rate rises

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In any case, all of Avant's rates allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions).