To fix or not to fix? – That is the question

2 min Read Published: 08 Feb 2010

With interest rates at an all time low is it time to fix your mortgage to benefit before interest rates begin to rise?

If :

  • you are thinking about remortgaging or
  • your current mortgage deal is due to expire or
  • the words to 'track', SVR and 'porting' mean nothing to you

then the following article is a must read and could save you money.

Why it may be time to remortgage

"Mortgage borrowers with building societies are getting a raw deal after two more mutuals raised their standard variable rates (SVR) last week, despite Bank rate remaining at 0.5% for 11 consecutive months."

But if after reading the above you want to fix your mortgage rate but are unsure whether to do it now or later, you could hedge your bets. The problem is that lenders factor in expected future interest rate rises into their mortgage offers. So if the Bank of England suddenly hikes up interest rates, or make noises that they might, the best fixed rate deals will dry up. So, if you are worried that interest rates will go up later in the year you could get a mortgage offer in place now and not complete for say 6 months. That way you have a good fixed rate deal ready to go and can still take advantage of your current low flexible rate for a few more months. Obviously you must bear in mind that you will likely incur non-refundable valuation charges and the lender could technically withdraw their offer before you accept. But these are risks that you would face even if you fixed now.

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