Fixed rate mortgages. How long should you lock in for?

With a fixed rate mortgage you can be sure of a certain level of financial security which means you are better able to budget. You know exactly what you will pay on your mortgage each month for an agreed period, however the question is how long should you fix?

Fixed rate mortgages can be found over various terms from 2 to 10 years. Generally the shorter the term the lower the rate, however to get the best deal is it vital to review all products market-wide.

Fixed rate mortgages are cheaper than they've been for years. Historically low rates are available from various lenders, making now the right time for a new deal.

For shorter term security consider a 2 year fixed rate. As well as mortgages available sub 2%, a 2 year period means freedom to switch to a new deal after a shorter period. A longer term 5 year fix offers increased security, however locking in for 5 years comes with greater restrictions if you want to switch.

Government initiatives such as Help to Buy and Funding for Lending have given lenders access to cheaper funding, this has led to deals getting far cheaper. For instance even 10 year fixed rates are now highly competitive, deals start at under 4%. Rates are currently low but you still need to think before locking into a longer term mortgage, 10 years is a long time and you could miss out if rates fall further.

With a fixed rate mortgage check any early redemption clause, ERCs can be costly so look into this before accepting any offer.

If you are looking for a fixed rate mortgage and would like advice as to which mortgage term would be best suited to your needs, call an adviser at Deal Direct.  We will review your circumstances and recommend the mortgage which would be most appropriate and affordable.

Call for a quote today on 0800 048 8828.