Should you fix your mortgage rate before interest rates rise again?
For those looking to remortgage or take out a new mortgage, there may be a difficult decision to make. Some people may have been looking into taking out a low rate variable rate mortgage, and there are some good deals available. However, recent reports suggested that there were also some very good fixed rate deals coming on to the market, enabling those that want to fix their repayment for a specified period to enjoy stability and easier financial management without having to pay through the nose in terms of interest.
However, the rates on fixed rate mortgages are still higher than those on variable rate mortgages, and consumers that are taking out a mortgage need to decide whether to take the gamble and opt for a variable rate, bearing in mind that many experts predict another Bank of England interest rate rise in May, or whether to play it safe and go with a fixed rate mortgage at a slightly higher rate to start with.
Some banks are now offering fixed rate mortgages of 5% or under, and experts state that there are more lower rate fixed rate deals on the way. However, as prediction change with regards to if and when the next interest rate change will take place, these fixed rate deals could start to disappear, leaving those looking for a fixed rate mortgage with no other option but to pay a higher rate. One industry professional stated: 'There are more good fixed-rate deals on the way. If you can fix in at around 5% or below, it is a good deal. But watch out for high set-up fees.'
Those looking to take out a fixed rate mortgage may be better off acting quickly before predictions about the next interest rate send fixed rates soaring again.
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