What fixed rate to go for?

[LadyJane]

We are coming off a 3 year fixed rate of 5.25% from Ulster Bank. In our eternal wisdom we passed up a tracker at +.75% because we thought we were being prudent. ha!

The good thing is, all the fixed rates we have been offered are lower than what we are currently paying. I am sure we want to fix but am conflicted whether to go for 3 or 5 yr. The 5 yr rate is quite a bit above the others, but I wonder if fixing for 5 years is the p'rudent 'thing to do, as some talking heads are saying interest rates could sky-rocket in the next few years...

Advice please!

Standard Variable 3.85
1 yr fixed 4.2
3 yr fixed 4.3
5 yr fixed 4.95

 

[LadyJane]

Any advice on this? Planning on sending the form back today...

Leaning toward the 5 year but also eyeing up the 3 yr as the extra cash would come in handy.

Any advice would be welcome!

 

[Murfnm]

If you have any plans in selling up/moving house, I would go for a shorter term as you will be penalised for leaving early. If you don't, shop around for the best 5 year rate.

 

[LadyJane]

Thanks Murfnm. We aren't in the position to shop around as I am positive we are in negative equity. However, it isn't really an issue for us as this is the house we plan to grow old in. I know that the 4.95% for 5yr that we have been offered isn't the best 5yr fixed on the market, but it isn't the worst, and is a quarter of a percent less than what we are currently paying...

 

[csirl]

In our eternal wisdom we passed up a tracker at +.75% because we thought we were being prudent. ha!

If the tracker is still on the table, bite their hands off and take it.

 

[LadyJane]

haha - if that tracker was still available I wouldn't even be posting!

I am trying to let it go that we passed up the tracker 3 years ago - another 10 years of therapy and I may be over it.

Unfortunately, we will roll on to the SVR of 3.85 if we don't fix. We definitely want to fix. Just for what term/what rate? I know it is anyone's guess...