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the 5 years makes me feel more comfortable but wary of making the "wrong" decision and being stuck for 5 years.
It would already be £300 cheaper than what I'm paying now, plus my student loan will be cleared by the end of this year so I would almost immediately have an extra £600 every month to put into savings if I wanted to.
I get the benefits of an offset, and chances are I would be saving something. But if our circumstances change and we have to use those savings, we'd be stuck with a "risky" mortgage and none of the offsettyness to combat the riskyness.
stevo_com-
It would already be £300 cheaper than what I'm paying now, plus my student loan will be cleared by the end of this year so I would almost immediately have an extra £600 every month to put into savings if I wanted to.
I'd seriously consider the long term fixed and continuing to pay the same amount (ie overpaying by £300 a month).
I assumed term (23 years) and mortgage value (£250K) but you'd be roughly £20k better off after the first 5 years in saved interest and lowered principle by using that £300. Over a full 23yr term, you'd save £20k in interest alone and repay over 5 years quicker...
If your circumstances change, you can always stop overpaying for a short amount of time...
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You can lock your self into a £300pcm 'saving' with no need to worry about the Stock Market/Brexit/Trump, for five long years.
Any other deals rely upon good fortune to match this.
5 years takes you beyond March 2019, the next UK GE and the US 2020.
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making the "wrong" decision and being stuck for 5 years.
Rates can only go down by 0.25% - They can go up by 10% - 15%
Easiest thing to do is make a spreadsheet of all payments, adjust it for interest rates going up, and seeing how that impacts your outgoings.
Soul
mespilus
NotThamesWater
BoE are already putting out feelers about raising interest rates over the next couple of years so i'd be wary of a short term fixed because that's just delaying the problem.
You could go with a tracker and keep an eye on rates but i'd go with the 5 year fixed then overpay the difference between it and your old rate. You'd come out ahead of all the other options in terms of remaining balance etc and have the safety of easy financial planning for the next 5 years...