Fix for longer with Avant?

P

Paul5555

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Hi all - just looking for a bit of advice regarding lengthening fixed rate.

We have a €780,000 mortgage with Avant @ 2.15%. We fixed for three years and have maybe 2.25 ye are a left.

I am considering asking to fix for 7 years at 3.15% which would cost about €400 more a month. Obviously this is a very significant increase but on the other hand would give us certainly for a much longer period of time as it’s very hard to know where rates could be at in late 2024 / early 2025.

Would consider switching if the break costs wouldn’t be prohibitive and this was a smart move also.

Additionally we will look to do an extension in around 2 years (why we fixed for this length initially). I understand we could probably get this as a top up and therefore not have to break the fixed period if we fixed for 7 years?

Appreciate any advice.
 
Paul F said:
@Paul5555 Please post your mortgage details in the switcher/re-fix thread (in the format shown in the first post). I'll estimate your break fee and how much it would cost you over the next few years if you switched to different Avant rates.
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Thanks- I will do. I guess the question was a bit more philosophical- ie, based on a rising interest rate environment would it be a smart long term decision?
 
Philosophically, Europeans have fixed for shorter times or been on variables as its cheaper but its a dubious strategy. In the UK apparantly even 2 year fixes have gone from 2.8 to something like 6% in a few days.
Wholesale rates are over 3 % for 10 year fixes in the Eurozone(correction they were a few days ago 3.1, on checking now its 2.9). That means retail is something like 4.5. I personally would bite anyones arm off for a 10 year fix at 3.5 or under assuming your not moving or overpaying in the next 10 years, everyones situation is different though and as the wholesale costs are high if rates fall then the break fees will be crippling especially for longer fixes.
 
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We recently broke from a 1.95% fixed rate with Avant for 7 years (had fixed in February 2022) to a 2.5% rate with Avant for 22 years. There was no break fee. Time will tell if that was the correct strategy however we wanted the security of knowing how much we would pay each month until the term end and we have no intention of ever moving house. However since you are looking for a top up in a few years time, fixing for a very long period like we did may not be good for you...
 
lomber said:
I personally would bite anyones arm off for a 10 year fix at 3.5 or under assuming your not moving or overpaying in the next 10 years, everyones situation is different though and as the wholesale costs are high if rates fall then the break fees will be crippling especially for longer fixes.
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Remember that Avant 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).

And Avant and some other lenders allow you to make very large overpayments every year without penalty – see this thread for details.
 
Sunnysoutheast said:
We recently broke from a 1.95% fixed rate with Avant for 7 years (had fixed in February 2022) to a 2.5% rate with Avant for 22 years. There was no break fee. Time will tell if that was the correct strategy however we wanted the security of knowing how much we would pay each month until the term end and we have no intention of ever moving house. However since you are looking for a top up in a few years time, fixing for a very long period like we did may not be good for you...
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That looks like a great decision to me.
 
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