“ to fix or not to fix”

Speculation continues over when the MPC ( Monetary Policy Committee) will increase BBR ( Bank Base Rate ).

Meanwhile thousands of people on unbelievably low standard variable interest rates are pondering what to do, following last weeks announcement that rates were to remain unchanged at the historic low of 0.50%. The talk for months has been not if, but when rates will be increased, and so the guessing game of when to change to a fixed rate goes on.

It should not go unnoticed that lenders have already started to raise fixed rates in anticipation of a rise in interest rates, and the likely exodus of variable rate borrowers to fixed rates, as the day of reckoning approaches. As always the banks will be looking to maximise profits, and it is likely that they will continue to ease up their fixed rate offerings.

So what to do? Well the truth is that there is no easy answer. Every month that passes clocks up more saving on mortgage costs, so the decision to change to paying more each month is easy to resist. However, delay until rates do change, could well mean that fixed rates will have moved even further upwards.

The range of products available can be daunting to the inexperienced. Headline rates of interest can be attractive, but are not always the best value, as fees added to the loan can be substantial, and may result in the total paid over the term of a fixed rate may be higher than a product with a higher rate and lower fees.

If a decision to change is made, the services of an experienced broker is invaluable. He or she has access to the whole of market, and exclusive deals, means that you can be sure that a mortgage recommended will be tailored to your needs. Mortgage Advisers need to be authorised by the Financial Services Authority, and you should ask to see evidence of this before engaging their services.