It’s one of the most difficult decisions to make when taking out a mortgage – should you fix or not? There are of course benefits to both. Fixing your mortgage rate gives you the security of knowing what you’re paying each month, making it easier to budget and plan ahead. Meanwhile opting for a variable rate often means you’ll get a better rate – albeit with the risk that it might change.
Over the last few years borrowers opting for variable rates have certainly benefited from doing so. Rates have been at a record low for a decade. Indeed, last month saw the first interest rise since 2007. That’s mean those borrowers whose mortgage rates track the Bank of England base rate have seen their mortgage repayments fall.
That being said of course the record low interest rate environment has meant even fixes have hit rock bottom levels.
But with rates not on the rise – albeit slowly – is now the time to fix for a longer period?
While some economists are predicting we’ll have several more rate rises in 2018 the Bank of England has made it clear it’s not in a hurry to raise rates again. The general consensus is we shouldn’t see another rise until perhaps next August or September and any rise will again be modest.
Despite this fixes are certainly becoming more popular. According to Paragon Mortgages almost 90% of all mortgages cases are fixed rate products and the amount of five year products reached an all-time high, at 39% of all mortgages written.
If you’re looking for security and stability now could be a good time to tie in to a good deal.
Call into see us at We Know Mortgages to see how we can help you find the perfect mortgage for you.
A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.