According to independent researcher Which? only one in three UK mortgage holders have no idea what mortgage rate they are paying. With the Bank of England telling us to keep out eyes on interest rates, it appears that a large proportion of the British public don’t seem to care too much if rates were to rise and they were suddenly found to be repaying more each month.
A shockingly low 29% of mortgage holders were absolutely certain of their exact rate. Nine out of ten mortgage holders who knew their exact rate felt like they were aware of the impact a mortgage rate rise could have on their finances, however only 58% of those who weren’t aware of their rate at all, had factored this in.
An increased number of mortgage lenders offer fixed rate deals to allow customers to secure a low rate for a significant duration. Fixed deals now occupy 75% of the mortgage marketplace, and have doubled in number in the last couple of years.
Getting yourself good, independent mortgage advice is key to getting yourself the best deal and rate for your individual circumstances. There are potentially huge savings to be made from moving from a variable rate to a fixed rate deal, and an element of protection for the years of uncertainty ahead.
Tracker mortgages track the base rate, and can currently work out to be cheaper than a fixed rate, but they will be subject to sudden repayment rises when the base rate heads upwards. A fixed rate offers far more protection in the long run.
Be sure to know when your current deal mortgage rate is due to end, that way you’ll be mindful to start searching for your next deal ahead of time so that you don’t fall party to the standard variable rate payments between mortgage products. These rates are inevitably higher, so you end up repaying more when you don’t have to.
If you are tempted by a fixed deal mortgage rate, it’s vital to weigh up early exit fees and arrangement fees. These can be hefty and may counteract any potential savings that could be made.