10 Fixed mortgage rates. Good idea or not?

May 22, 2015 by in category Mortgage News with 0 and 0

Woolwich recently launched a 10 year fixed rate at less than 3%.
Should you be fixing your mortgage for the next decade?
The question being asked-is it a good idea to lock yourself into a loan for such a sustained period? Or would you be better off switching to a shorter-term deal?

Knowing how much your monthly repayments will be for some time into the future is the advantage of fixed-rate mortgages and you would therefore expect that you will be able to rest reassured that your mortgage will be affordable for the length of your fixed deal.

However, it could mean you end up paying more than you need to if the rate at which you fix remains higher than standard rates for any length of time. Whilst ever the Bank of England’s base rate remains low the only way that mortgage rates will go is up. So, that begs the question, when?

As a rate rise still seems some way off yet, it does mean that lenders are able to offer some outstanding shorter term fixed-rate deals

So would a shorter term fixed rate be a better bet? With 10 year deal they are often accompanied by hefty redemption penalties over the fixed-rate period, so borrowers tempted should look at all aspects of the mortgage and evaluate whether it is likely they we need to get out quickly.

Individual circumstances can change dramatically during that time, so although in theory such a loan is ‘portable’ and you can take it with you if you move, that still requires the borrower to fit the lender’s criteria at that time – and if not, you may be refused.

Two and five-year fixes remain the most popular choices, particularly the latter, which give medium-term security while costing not much more than a two-year deal

London Mortgage Advice Ltd is authorized and regulated by the Financial Conduct Authority for residential mortgages and non investment insurance business.

Although London Mortgage Advice Ltd is regulated by FCA, commercial mortgages and most buy-to-let and offshore mortgages are not regulated by the FCA.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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