To Fix or Not to Fix

With the Bank of England base rate now being at 0.5% for some time and many experts feeling that it will not rise in the near future, should fixing your mortgage be a consideration?

Although there may seem little need to consider fixing your mortgage for the next couple of years as rates could well stay at their curent level over this period, when you consider that 5 year fixed rates are at historic lows I feel this option is definitely worth considering.

If you have 25%+ equity in your home you could be fixing at rates below 4%

Even with equity of only 15%, you could be fixing your mortgage at rates below 5%.

It may only need a small fall in property values for the opportunity of fixing on deals taking advantage of your current equity to disappear.

Also, I feel quite sure that when the first rise is announced there will be a wave of borrowers looking to fix there mortgages and it is likely that the lenders will increase their rates to control levels of business, maintain there margins or just because they can!

Myself? I have 15% equity and I have just applied for a 5 year fixed mortgage. This was not as difficult a decision as those on low variable rates with their lender as my current lenders standard variable rate is 5.79%. 

Speak to your adviser to see what options you have available and do bear in mind that although the base rate may remain low, it is a lot less certain where house prices are going in the short term, although many, including myself, do not see them going up!

Steve O'Mara