3 min Read
02 Aug 2013

Written by Damien

Damien is one of the most widely quoted money and investment experts in the national press and has made numerous radio & TV appearances. He created MoneytotheMasses.com while working in the City when he became disillusioned with the way the public were left to fend for themselves because they could not afford financial advice.

More about Damien

Act now to get a cheap mortgage

egg timer

Is now the time to fix your mortgage?

 Mortgage rates are going up

According to data from the price comparison website Moneyfacts.co.uk, and quoted in this week's Sunday Times, average mortgage rates have crept up since the start of July. In particular:

  • the average two-year fixed rate mortgage has risen from 3.63% to 3.7%
  • average three-year deals have gone from 4.02% to 4.07%
  • and five-year fixed deals have risen from 3.86%to 3.89% on average

But haven't some mortgage rates been going down?

Yes they have. There have been a number of mortgage rate cuts recently from the likes of West Bromwich and Leeds building societies, 0.1% in the case of West Bromwich and 0.34% for the latter.

But the numbers from Moneyfacts.co.uk relate to the market averages so they give a good steer as to the underlying trend for fixed mortgage rates, which seems to be upwards. This is a continuation of the trend we saw in June when a number of lenders withdrew their competitive fixed deals.

So should I fix my mortgage now?

First of all read my article ‘Should I fix my mortgage now?’ where I answer this question in full. But in summary, back in June Ray Boulger of mortgage broker John Charcol was quoted as saying “I think we'll look back on June 2013 and say, 'that's when fixed rates hit bottom' ". The fact that rates are continuing their upward trend means that those thinking of fixing their mortgage rate might want to act sooner rather than later.

There are still some good deals about especially for those with significant equity in their property. For example, Nat West has a 2 year fixed deal (for those with a 60% loan to value) with an initial rate of 1.95%. And just today HSBC has launched the lowest 2 year fixed deal in the market at 1.49% for those with 40% deposit or equity in their property.

But always make sure you look beyond the headline fees and consider the total cost of the mortgage, as there are some hefty fees about. The lender fee on the aforementioned Nat West deal is a sizeable £1,495 while the new HSBC mortgage deal has a whopping £1,999 fee. You can compare mortgages by visiting moneysupermarket.co.uk.

Alternatively to find the best fixed rate mortgage deal speak to a good mortgage adviser and review your mortgage. You can get in touch with a mortgage adviser, with no obligation on your part, by clicking here.

(image by Salvatore Vuono, freedigitalphotos.net)

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