With the Bank of England raising interest rates back to 0.5% and talks that interest it will be at 1% by 2020 now is the time to consider a fixed rate mortgage. Getting a mortgage is one of the biggest financial commitments you're ever likely to make. So it's crucial to understand what type of mortgage will suit you best.
A fixed rate mortgage is a mortgage where the interest rate is agreed at the start of the mortgage and will not change during that fixed period i.e. £100,000 loan, for 20 years, on a 5 year 2.99% fixed rate mortgage will cost £555. After the 5 years, you will automatically change over to the lender's standard variable mortgage rates which as of November 2017 now average at 4.9%, although they can be as high as 6%. If you are currently paying standard variable rate (SVR) you are vulnerable to interest rate rises. If interest rates go up then so will your monthly mortgage payments.
Is now the best time to fix your mortgage
In theory, there has never been a better time to fix your mortgage rate. Given the ongoing uncertainty, not only around interest rate rises but also the ongoing Brexit negotiations and the backdrop of rising household costs it's perhaps not a surprise to see more people consider the benefits of fixing for longer.
For more information on fixing your mortgage get in touch with Elm Tree Financial Services on 01925 815 555 or visit www.elmtreefs.co.uk