Fixed rate or tracker mortgages – which to choose?
Over the last few years the Bank of England base rate has been set at 0.5% and anyone with a tracker mortgage has benefited from low rates.
Predictions are that the base rate may not rise until 2016 or even later, but it is likely to rise at some point and tracker rates will rise with it.
By comparison fixed rate mortgages offer the security of knowing exactly what your monthly payments will be.
There has always been a higher cost for securing a fixed rate, but with lenders cutting longer term fixed rates the margin has closed.
Deal Direct can offer impartial advice and compare fixed and tracker mortgages from throughout the market.
Is a tracker or fixed rate mortgage best for you?
If you could afford your rate to rise by several percent, then a tracker mortgage with a low current rate may be worth the risk of rises in the future.
A lifetime tracker is an option that can offer low current rates, but could allow you to switch without penalties if rates begin to rise suddenly.
However, if your budget is inflexible and you need know what your payments are going to be, a fixed rate is the only way to be certain. Fixed rates have dramatically fallen since funding for lending was launched. A thorough market search may reveal that riskier tracker mortgages are currently on fractionally more competitive than more secure fixed rate mortgages.
Deal Direct are up to date on all market changes and can offer you a competitive mortgage quote to suit your circumstances.
Call an advisor on 0800 048 8828 for advice and a low rate quote.
