Warning – beware rising mortgage rates.

With rising mortgage rates, variable rate mortgage-holders are being advised to switch deals to a fixed rate or tracker option.

Millions of standard variable rate mortgage-holders are being urged to makes plan for when their rates rise further. The Bank of England may have kept the base rate at 0.5% for a further month, however this is unlikely to influence mortgage rates offered by lenders experiencing rising funding costs.

In the past month various banks have responded by increasing their variable rates in order to maintain their profit levels. It is anticipated that over a million mortgage-holders have already been hit by rising variable rate mortgage costs, and those who can have been advised to switch to a cheaper deal.

Around 2 in 5 mortgage-holders are said to be on variable rate deals and those with 15% equity with a rate of 4% or higher could save themselves money by finding a better rate. There are currently cheaper fixed and tracker mortgage offers available under 3.5%.

It is predicted that the base rate could remain at it's historic low as far into the future as 2016, therefore a tracker mortgage while higher risk than a fixed rate mortgage could be a relatively 'safe' bet, However predictions are just best guesses so the element of risk remains.

However because a tracker is linked to the base rate mortgage-holders will not be at the mercy of their lender, unlike those who remain on a standard variable rate.

Mortgage rates are on the increase, therefore those home-owners who prefer certainty are better off opting for a fixed rate where they are guaranteed they will only pay the monthly repayments agreed.

For the most competitive mortgage offers

contact Deal Direct.