As a Berkshire mortgage broker equipped with a team of highly experienced Maidenhead mortgage advisers, it should come as no surprise to you that it’s our job to stay abreast of – and remain sensitive to – the mortgage market.
So, when we came across a piece in inews.co.uk, which outlined how experts are predicting an end to the recent flurry of interest rate rises, then it was hugely reassuring for two reasons.
Firstly, it means that there’s a chance that we may begin to see light at the end of what feels like an exceptionally long tunnel (the Bank of England’s (BoE) base rate has increased a staggering 14 times since December 2021). And secondly, it means that the answer to the frequently asked question of ‘should I fix my mortgage?’ may start to become clearer.
Fixed rate mortgages vs tracker mortgages
The last 12 months have been particularly interesting for mortgages, and particularly challenging for mortgage brokers, all of whom will have been grappling with constant rate changes, sometimes on a daily basis.
It wasn’t that long ago that most people were on fixed rate mortgages. Not only that, but they might have even been fixed somewhere between one and two per cent. Today, the average UK fixed mortgage rate stands somewhere around the six per cent mark.
Depending on your appetite for risk, if you’re being told that the BoE is going to continue increasing the base rate, a tracker mortgage, the payments for which increase each time the base rate jumps, may seem like a risk too far. As a result, you may decide to fix at today’s rate.
But if base rate stabilisation – or even a base rate reduction – is on the horizon, you may want to sit and wait before jumping into a fixed rate mortgage.
Nothing lasts forever
Remember the financial crash of 2008? Or the negative impact that Brexit and Covid had on the stock market? Although they seem earth-shatteringly bad at the time, life – including the mortgage market – bounces back and moves on.
As it stands, there are a lot of things to consider when it comes to applying for a mortgage, one of which is that the base rate cannot continue to increase month on month indefinitely. Whilst we don’t foresee it dropping to anywhere near post-2008 crash levels any time soon, we also don’t foresee it increasing that much higher, too.
Back to the question, then: should I fix my mortgage? This depends on several things including your financial situation, life stage, plans for retirement and, as mentioned earlier, your appetite for risk. A good mortgage broker will cover off all of these aspects with you and help you come to a decision that you’re much less likely to regret than if you make a decision without any professional input.
Whilst we can’t specifically say whether you should or shouldn’t fix right now – not prior to a consultation, at least – we can specifically say that mortgage broker advice in an uncertain economic climate is invaluable and will undoubtedly help you come to a clear decision.
Alton Mortgages is a Berkshire mortgage broker that specialises in a wide range of mortgages. To speak with one of our Maidenhead mortgage brokers contact the team on 01628 560820 or email enquiries@altonmortgages.co.uk.