Tuesday, 1 February 2011

Should You Fix Your Mortgage NOW!? This might help you decide.

For today's Blog we are grateful for a guest posting courtesy of Rachel Gill, of Aspect Mortgages.

Thanks to Michael for asking me to guest blog. Since Christmas many people have been asking me if they should fix their mortgage. Here are some basic tips that might help you, if you were wondering the same thing:

• If you are trying to second guess what the interest rates will do over the next few years - think again if you are on a tight budget. You have a fighting chance of guessing correctly but can you afford it if you get it wrong?

• Work out how much your mortgage payments would go up for every 1% that interest rates may increase (if you have a mortgage illustration or a mortgage offer relating to your own mortgage, then section 7 should help you with this.) You should then be able to make a better judgement on what to do if you know how future interest rises will affect your household budget.

• Remember that no one knows how much interest rates will go up (or if at all). Look at the Bank of England website if you want a history of how the base rate fluctuates and how this could affect a deal related to it.

• If you feel that interest rates will not rise significantly enough to affect your lifestyle (and you can afford to make that call) then sticking with your standard variable rate, (if it is a low one), or taking a mortgage relating to the Bank of England Base Rate (Tracker/Discounted/Capped etc) could be the right option for you right now

Each person's circumstances are so different that it is impossible to give a single formula to help you decide but I hope these tips help. I think that rates will rise slowly but surely over the next couple of years, but ask me again in a week and my opinion will have changed along with our fluctuating economy. The key is to assess your own circumstances before looking at the wider issues such as interest rates.

Rachel Gill
Mortgage Adviser with Aspect Mortgages

Your home may be repossessed if you do not keep up repayments on your mortgage
Aspect Mortgages is registered in England, Company Registration Number 5103801. Registered office: 24 St Andrews Avenue, Ashton-on-Ribble, Preston, PR2 1JN.
Aspect Mortgages is a trading name of Aspect Mortgages Ltd which is authorised and regulated by the Financial Services Authority.

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