Why fixed-term mortgages are the secret sauce and how to make the most of them
The Bank of England has continually increased the UK’s base interest rate!
This increase is intended to tackle skyrocketing inflation and living costs.
Unfortunately, as many lenders use this rate to calculate mortgage rates, any increase can have an immediate impact on your monthly payment!
Luckily, we have a clever solution.
The Mortgage Advice Bureau recommends that when interest rates rise in this way, you should “seriously consider” locking in a fixed-term deal.
However, even if you already have one, don’t rest on your laurels!
More than half of these deals are set to expire by 2024.
Read on to discover how a fixed-term mortgage could be the secret sauce to shelter yourself from market fluctuations and protect your home.
The mortgage superhero: Fixed-term to rescue!
Fixed-term mortgages can save you thousands long-term.
While a variable rate mortgage is often cheaper initially, these rates vary with market conditions.
This means that when the Bank of England base interest rate hikes, your bank account will feel every bump!
Fixed-rate mortgages, on the other hand, shelter you from any increases by locking at their initial rate for the full length of your term.
This is why if you are one of approximately two million UK homeowners with a variable mortgage, you may be better off switching!
I already have a fixed-term mortgage
Not so fast! According to Brian Murphy, head of lending at the Mortgage Advice Bureau, 50% of these deals will be gone by 2024.
Falling from a protected fixed term rate to a more expensive variable rate can be a big shock!
You will need to act quickly to keep yourself protected:
Speak to us
You may be able to lengthen your mortgage term to shelter yourself from interest rates for longer.
Overpay on your mortgage
This can help with payments long-term, and secure more equity in your home faster!
Book a call with us!
Independent advice from a trusted mortgage broker (*ahem* such as our expert FOMO team) will help you secure the best option for you!
Book a call here to speak to us.