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Some things to think about, going for the 5 year fix, if you're move after 3 doesn't go smoothly, i.e. will you sell, then rent for a bit, then buy, you may be liable for ERC of 1 - 2% of the loan, this would be on top of the £2000 extra you have paid for the privilege of a 5 year fix. However, if you can Port your mortgage it may be possible to bring that rate with you. (make sure this is part of the deal with this rate).
With a 3 year fix, you would have a bit more flexibility when it came to moving, you wouldn't need to worry about an ERC and the money you have saved may offset any increase in interest for the next Mortgage you get, however, you would need to calculate what kind of an increase in the base rate would be required to push you over that threshold.
Unfortunately Brexit, so who knows.
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Bernhard
Bainbridge
We are having to choose between a 5 year fix and a 3 year (which is £60 cheaper p/m).
Everyone seems to be looking to fix for 5 years - but we will probably move in around 3 years time.
Is it worth the extra £2000 over 3 years to get the 5 year fixed? Is it fears over Brexit? I know there’s a potential GE around that tile too but I can’t imagine May will be around then, so can see one being triggered before that.