Are Fixed Mortgage Rates Higher?
Yes – but peace of mind often makes paying more the better option
When looking for a mortgage or remortgage, it can be tempting to opt for the cheapest package available. This could be in the form of a variable or tracker mortgage, where interest rates fluctuate and often reduce the monthly repayment amount. However, it is important to consider the long-term aspect of this kind of mortgage. If interest rates go up, so will your repayments.
Fixed mortgage rates provide a great deal of security to people who have little or no leeway on their mortgage repayments, and therefore cannot afford for the repayments to go up. Borrowers with fixed mortgage rates are not affected if interest rates go up, as their mortgage repayments remain the same. A disadvantage of this of course, is that when interest rates go down, their repayments remain the same. However, often the security offered by fixed mortgage rates that you’ll be able to meet your monthly repayments, offsets having to pay a little more.
One possibility is to opt for fixed mortgage rates for a set term, and then switch to another type of mortgage when your finances become secure. This is a good solution to avoid having to pay the fixed rates once you are financially stable, but bear in mind that fixed rate mortgages often carry a charge for early repayment.
At the Mortgage Advice Center we know that it can be tricky to find a mortgage that suits your needs and circumstances exactly. That is why we are here to help you find suitable solutions. Our mortgage experts will guide you through the whole process from start to finish. We work on a ‘whole of market’ basis, which means we check out all the options available across the whole mortgage market – and not from a limited range of products that many lenders are restricted to, to get the perfect mortgage for your requirements.