Fixed Or Variable Mortgages- Which One Should You Choose?
The mortgage market is beginning to stabilise and when people look into getting a mortgage
, whether it is the first or twenty first mortgage deal, they will need to think about the options that are available to them. One very important option is the choice between a fixed and variable mortgage, there are a few things to consider when deciding between the two and you should seek the advice of a whole of market mortgage broker.
The first thing to consider is the Bank of England base rate which at the moment is at the lowest rate for 300 years. This rate currently stands at 0.5% so the logical thinking would be that rate is going to increase rather than decrease. If the base rate was to increase this is going to have an effect on your repayments so you must weigh up the likelihood of this rate increasing against the likelihood of it remaining at its current level.
When making the decision between fixed and variable many people are not sure which one to choose but if you are in the same boat as many other then you can seek advice from those who have been in the mortgage market for many years. Trying to second guess the UK economy is not an easy thing and for those who do not have the extensive knowledge required to make an educated guess should seek the advice of a whole of market mortgage broker as they have access to the latest deals from a wide range of lenders rather than being restricted to in their offering.
Fixed mortgages can be beneficial because if you are on a tight budget and need to be 100% sure of what is coming in and out of your account then a fixed mortgage may be the one for you. Fixed mortgages are not affected by a rise in interest rates and therefore you can budget each month. Variable rates, on the other hand, are affected by rises and falls in rates so you may find yourself paying more one month but less another month.
Many people want to get into their new home as quickly as possible and therefore go for the deal that gives them the lowest repayments, and this is often a base rate tracker deal. However, this should be given serious consideration to before you agree to any deal and should be talked over with an expert first.