Re: 5 year fixed mortgage

Hi,

I am looking for some advice please about getting my first mortgage. I am buying an appartment throught the affordable housing. I am getting a 5 year fixed rate mortgage (rate: 6.24) had to go with 5 year fixed to get the mortage that I needed, but what happens after the five years are up. Will I be paying more or less?

I also need to decide about mortgage protection. Should I just take out the minimum?

Should I take out serious illness cover? I am single and was thinking of taking this out. Just want to cover myself if I get sick and wont be able to pay my mortgage. Any advice will be appreciated.

Many thanks

Delphi said:

what happens after the five years are up. Will I be paying more or less?

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If you don't have any equity in the property, your lender will most likely screw you for as high an interest rate as they can. This is the elephant in the room at the moment.

If you do have equity in the property you can shop around for a better deal, but rates will depend on market conditions in 5 years.

After the 5 years you will be given the option to fix it, or go with variable or tracker. It is impossible to say whether it will be more or less than now, it depends on the interest rates at the time.

Life insurance - If you've no dependants, I'd stick with going with the minimum to cover the mortgage. Anything extra would just go to your estate.

Look up on serious illness versus income protection. I got my place on my own and it was, and still is, something that concerns me.

Best of luck - Dem