It has been widely reported that the chaotic financial events witnessed in recent weeks has had a profound impact on the mortgage market – with homeowners facing a worrying scenario of spiralling rates and huge uncertainty.
Although the newest Chancellor, Jeremy Hunt, has rowed back on much of the Government’s package of tax cuts – the economic wake has left the average fixed rate deals significantly higher and the variable rate exposed to further hikes in the months ahead as the Bank of England try to dampen inflationary pressures through base rate increases.
For those in the situation of having to consider taking out a new mortgage, or remortgage, deal right now, there is no way of winding back the clock… the question they are faced with is “to fix or not to fix” in the current climate?
For example, the best five-year fixed rate mortgage available today is 5.35%, with a two-year fix at 5.64%, however, there is a two year tracker, with no penalties, at 3%. Admittedly, the tracker deal would increase in line with bank base rate rises, therefore, one strategy could be to ride the interest wave up and then back down (if it comes back down) and then fix again at a suitable time.
Sitting down and working out the possible strategies and permutations with an independent mortgage broker – somebody with the experience to calculate the costings to enable you to make as informed a decision as possible – could help see the wood from the trees right now. Here at The Financial Planning Group, Steve Padgham is available to help clarify what is a confusing time for all homeowners.
If you or a friend or family member has a mortgage or remortgage situation on the horizon and would like to talk though some options, please contact Steve Padgham via e-mail at Steve.Padgham@fpgonline.co.uk or by calling 020 8977 7090.