A 5 year fixed rate mortgage could protect you from rising rates.
Longer term deals such as a 5 year fixed rate mortgage may lessen the risk of having to remortgage when rates have risen. If predictions that the Bank of England base rate will remain low for a further two years are correct, a short term fixed rate could come to an end just as rates are rising.
Even though rates have generally been rising in the past few months, there are still some good offers in the market if you want to fix your rate. The low base rate is helping to stimulate competition between lenders who offer 5 year products. There are over a dozen lenders that are still offering a 5 year fixed rate mortgage at rates of less than 4%.
The Bank of England has recently warned that difficulties in the eurozone could put pressure on mortgage costs and see them rise further. The market is changing rapidly so if you want the security of a longer fixed rate, you should secure one now before the best offers disappear.
Opting for a 5 year fixed rate mortgage will give you the security of knowing exactly what your payments will be for the next 5 years. Whilst some economists believe that the Bank of England will maintain the low base rate there is no certainty in this. The only way to ensure that your rates will not change is to fix your rate.
