Choosing the best mortgage deal.

It is easy to become confused working out which is the best mortgage deal. The mortgage market is highly complex and making a decision as to which product to chose can be stressful, after all any mistake could be very costly.

Basically there are two types of mortgage which are fixed and variable. Which is the best mortgage deal for you depends very much on your financial circumstances and personal needs.

Fixed rate mortgage products are most suited to risk averse borrowers as they charge a set rate of mortgage interest for a set period of time. The length of mortgage term agreed is down to the individual, but lenders tend to offer products most commonly over 2, 3 and 5 years. The most popular fixed rate term is currently 2 years accounting for 30% of all deals.

The advantage of a fixed deal is the security of knowing exactly what your mortgage repayments will be for a fixed period of time. There is comfort in knowing you will be protected from any mortgage rate increases during the period agreed.

For those home-owners willing to take a risk the base rate will remain low a variable rate mortgage can be appealing. Often variable rate deals such as trackers have the most competitive rates of all mortgage products. However being prepared to accept the risk that rates can rise is the price that must be paid for a low rate.

A tracker mortgage rate is pegged a certain percentage above the Bank rate and moves up and down with changes in the interest rate. For the last 3 years those on a tracker have done very well as the base rate has remained at 0.5%.

Lenders funding costs have increased and their mortgage rates are now rising to cover these extra funding costs. If you are looking for the best mortgage deal currently offer you are advised to act soon before the cheapest rates disappear.

Contact Deal Direct today for mortgage advice and an up to date mortgage quote.