Experts are encouraging consumers seeking fixed rate mortgages to carefully consider their options before jumping in. Although a fixed rate mortgage will offer more security, right now with rates as high as they are, they can also be very expensive. In order to get the best deal, consumers are urged to do their homework on fixed rate mortgages and shop around with several banks in order to get the best deal possible. With care, a fixed rate mortgage can be a good things, but with high rates, many should be prepared to pay more.
“Normally you would encourage borrowers to shop around at the end of their deal and avoid going on to the SVR. But that’s not so easy now,” said Louise Cuming, head of mortgages at moneysupermarket.com. “Lenders have changed their criteria so you can’t borrow at the same multiples as before, so borrowers need to consider SVRs even if they’re not effectively trapped into them.”
“Whenever it comes to remortgaging, compare the cost of the fixed rate, including any fees, against what you would pay with an SVR over the same length of time,” advised John Postlethwaite, mortgage expert at Punter Southall Financial Management in Edinburgh.
Related reading: Home Mortgage
Comment on this article