MTTM Podcast Episode 491 – Should you fix your mortgage, best travel insurance checklist, money q’s most get wrong

Listen to Episode 491

On this week's episode, Damien discusses whether you should fix your mortgage or take out a tracker mortgage. He then talks about how to find the best travel insurance for you, including what to look for in a policy and some tips to save money. Finally, Andy revisits the 2024 weekly podcast quizzes, revealing which questions listeners struggled with the most

Thank you to our sponsor Lightyear

This show is sponsored by Lightyear*, a new, straightforward platform offering a Stocks & Shares ISA. With no account, subscription or custody fees, Lightyear’s Stocks & Shares (S&S) ISA will be 10 times cheaper than the average market provider over 10 years (based on research conducted by Capital Economics) and its Cash ISA offers easy access to the Bank of England base rate. Both accounts are flexible, so you can withdraw and re-invest without affecting your annual limit. Capital is at risk and ISA rules apply. Other fees - like foreign exchange fees - may apply. Lightyear UK Ltd is authorised and regulated by the Financial Conduct Authority

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Episode 491 Podcast Summary

Should you fix your mortgage?

Summary:

I provide an in-depth overview of the mortgage market, covering the different types of mortgages available, including fixed rate, variable rate (tracker and standard variable), discount rate, and offset mortgages. I then provide an update on the current mortgage market, explaining what type of person should fix and whether a 2 or 5 year fix is best.

Key insights:

• The different mortgage types include fixed rate, variable rate (tracker and standard variable), discount rate, and offset mortgages
• The Bank of England base rate has a strong influence on mortgage rates, but the relationship is not linear
• Overnight index swap rates can provide an indicator of future interest rate predictions
• Factors beyond just the base rate, such as gilt yields, politics, and lenders' access to capital, also influence mortgage rates

Travel insurance checklist

Summary:

In this section I explain the importance of travel insurance, covering medical emergencies, trip cancellations, lost luggage, and natural disasters. I outline the different types of travel insurance, including single trip, annual multi-trip, and specialised policies for activities like winter sports and backpacking. I provide a detailed checklist of must-have coverage options in a travel insurance policy, such as medical expense coverage, repatriation services, and cancellation and curtailment coverage. I also emphasise the importance of booking travel insurance immediately after booking a trip to ensure coverage in case of unforeseen events.

Key insights:

• Travel insurance provides a financial safety net for unexpected costs during a trip, such as medical emergencies and trip cancellations
• There are different types of travel insurance, including single trip, annual multi-trip, and specialized policies
• Booking travel insurance immediately after booking a trip is crucial to ensure coverage for unforeseen events
• Use should use comparison sites and independent rating agencies to compare travel insurance policies

Popular quiz questions from 2024

Summary:

In the final section, Andy reviews the most popular questions from the podcast quizzes in 2024.

Key insights:

• The maximum contribution to a Junior SIPP is £2,880 pounds, with the 20% tax relief from the government topping it up to £3,600 pounds
• The optimal time to shop around for car insurance is 26 days before the renewal date
• Enhanced annuities provide a higher income due to the policyholder's medical conditions

Episode quiz

Questions

1. What is a good rule of thumb when working out the financial impact of a 1% increase in mortgage rate?
   a) £50 per £100,000 of mortgage
   b) £75 per £100,000 of mortgage
   c) £100 per £100,000 of mortgage
   d) £225 per £100,000 of mortgage
2. When choosing between a fixed rate or variable rate mortgage, what is a key consideration?
   a) Your attitude towards interest rate risk
   b) Your future plans and how your circumstances may change
   c) The current level of the Bank of England base rate
   d) All of the above
3. Ideally, how soon should you be contacting your broker when it comes to remortgaging?
   a) 1 month before your deal ends
   b) 2 months before your deal ends
   c) 3 months before your deal ends
   d) 6 months before your deal ends
4. What is the minimum recommended medical expense coverage for travel within Europe?
   a) £500,000
   b) £1,000,000
   c) £1,500,000
   d) £2,000,000
5. What is Damien's advice if you have a European Health Insurance Card (EHIC) or Global Health Insurance Card (GHIC)?
   a) You do not need any additional travel insurance
   b) The EHIC/GHIC eliminates the need for medical coverage in your travel insurance
   c) The EHIC/GHIC only provides access to state-provided healthcare, so travel insurance is still recommended
   d) The EHIC/GHIC is sufficient for travel within Europe, but not for travel outside of Europe

Answers

1. a) £50
2. d) All of the above
3. d) 6 months before your deal ends
4. b) £1,000,000
5. c) The EHIC/GHIC only provides access to state-provided healthcare, so travel insurance is still recommended

Resources

Links referred to in the podcast:

• Best mortgage rates in the UK
• Best questions to ask a mortgage broker
• Will interest rates continue to fall in 2025
• The best travel insurance providers 2025
• Lightyear review