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Is now a good time to fix?
With interest rates at an all time low - and held steady at 0.5% for quite a few months - is now the time to choose a fixed rate mortgage/remortgage?
It's a question that lots of customers of TMP Mortgage Zone ask. And there is no simple answer. The main advantage of a fixed rate mortgage is that your monthly mortgage payments do not go up if and when interest rates start to rise again. You therefore have peace of mind for the length of term of the fixed rate period.
Of course fixed rate mortgages also don't go down with interest rate cuts, so over the past 12 months as rates have been slashed, anyone on a fixed rate deal might have been looking with envy at those on tracker rates or standard variable rates who's monthly bills went down with each cut by the Bank of England.
But with interest rates at 0.5% they are not going to get any lower and the Bank of England indicated recently that it expected interest rates to remain low going into next year. So taking a fixed rate deal now may mean paying a premium versus other mortgage options, but were interest rates to rise significantly in 2010 that 'expensive' fixed rate deal could become much more attractive.
Tony Rice, from Bedfordshire-based specialist mortgage and insurance broker TMP Mortgage Zone, said: "If you haven't reviewed your mortgage for a while or your current deal is ending within the next 6 months, now is the time to start looking around. If you are on a mortgage rate of 4-5% it is likely that you can find a cheaper mortgage elsewhere, whether that is fixed or not. Searching the whole of the market will always get you the best possible deal."
[ 01-10-2009 ]
