Mortgage Best Rate

It’s a fact that many of us are confused when it comes to mortgages, you can choose to have fixed rate or variable or tracker, in some adverts on the TV they produce all manner of combinations of these and all it manages to do is confuse the general public who end up reacting to all the news about lending being reduced and panic buy a mortgage with no consideration of how good it is.

In recent years more people have been taking out fixed rate mortgages as they don’t want to ride the rollercoaster of interest rates with variable rate mortgages. A recent survey found 35 percent of people would opt for a fixed rate mortgage rather than a variable one, this figure was up 13 percent on last month in February.

What makes this figure strange though is that in the past month the Bank of England has cut its base rate from 5.50 to 5.25 percent, and this has had little or no effect on borrower’s choices. More people are choosing long term fixed mortgages for periods as long as five years, with some organisations suggesting that even longer periods such as ten or twenty-five year mortgages will help promote stability in the mortgage market.

The same study also found that a worryingly large percentage of borrowers do not understand the mortgages business fully and so may get stuck with a mis-sold mortgage, despite implications that bank rates have no way to go but down. The current economic uncertainty seems to have borrowers spooked and so they go for fixed rate mortgages.

So you can understand the confusion with mortgages, on one side you’ve got an expert saying you should be going for infinitely long term fixed mortgages, whereas someone else says you should be considering variable or offset mortgages as the rates are supposedly meant to drop. The only definitive answer is that every case is different and what’s right for person X is not necessarily best for person Y. If you are considering a mortgage or are up for renewal soon and think you’d be better off elsewhere then make sure you get guidance from an advisor as they will be better equipped to deal with your case.