Is it time to fix your repayments?
It's been a few months now since the banks of Englanf govenor Mark Carney increased the base rate by 25 basis points. This led to an borrowers looking for the best fixed rate mortgaged and a definite change in peoples thoughts on their mortgage.
Fixing your mortgage simply means that you have security of mortgage payments for a given period, typically 2, 3 or 5 years. We are however seeing some lenders offering fixed rates for up to 10 years. What you do potentially lose is some flexibility given that most lenders will not allow you to clear the mortgage in full witin the fixed period without an early redemption charge. With residential mortgages, lenders will usually allow you to transfer the mortgage to a new home if you are moving (not one you already own) but, this would be subject to fresh underwriting at the time. This flexibility is not as common with Buy to Let mortgages.
We have seen a lot of activity amongst the lenders over the past few weeks with some increasing rates in light of the view that Base rate may rise again later this year whilst others have reduced theirs to increase market share.
Discussions over longer terms fixed rates of 10 years are becoming more common than ever. Although consideration need to be given over potential changes in circumstances, there are definitely times when fixing for 10 years can makes sense. Each individual persons circumstances needs to be taken into account before a recommendation is made whatever the mortgage. With all this talk of fixed rates, it may be that for whatever reason a floating rate is the best advice or even a mixture of both! If it was that easy to pick a mortgage, we wouldn't need Brokers!
Wish to discuss finances?
Contact Darren Littler mortgages to discuss your mortgage or remortgage requirements. We will assist you in finding the best solution.