With many borrowers sitting tight on their variable rate mortgages watching the market unfold, we have the lowest fixed rate products available in years. From rates as low as 2.29% ( overall cost for comparison 3.3% APR), many experts say that remortgage customers would be silly not to at least book in a rate or talk to an advisor about their options.
Many people don't realise that they can 'hold' rates for a period of up to six months. Booking in a fixed rate now or submitting a mortgage application with a view to attain a mortgage offer is a sensible idea in the current climate, as it allows you to keep hold of a product available today, then you decide whether to complete on the mortgage or stay put.
Effectively, it's the card game equivalent of having an ace card up your sleeve. The point being that you don't have to use it right now, but in a few months you may need to call upon it. With variable rates low at the moment, there isn't the motivation to look into another mortgage. But, with the news today that the Bank of England may start ‘printing' money, this can only mean inflation will creep up again.
When inflation creeps back in, the text book rule is that interest rates must rise. See the article on ‘quantitative easing' here:http://www.independent.co.uk/news/business/news/bank-will-print-money-as-uk-sees-deep-recession-1607393.html
The truth is, we don't really know what will happen over the next six months (with the various government and monetary interventions), but one thing we can be sure about is that looking backing in hindsight is not the best option for us to choose right now. Look at it this way, if you had the option to secure a tracker mortgage in the Autumn of 2008, at 1.50% below base rate with your remortgage due in January, there's no question about what a great idea it would have been. Right?
The same principle applies now with the fixed rates, if you do something about it now then in six months you can either call upon your low fixed rate mortgage offer or remain on your variable rate.
Now, each lender is different when it comes to booking rates. Some lenders will require you to sign up and wait until you get a mortgage offer before your rate is secure. Usually once this happens you secure the mortgage rate for a period of six months. As there are no set rules and the criteria changes all the time from lender to lender, you are best letting our broker sort it out for you. Our advisor can guide and support you through your mortgage application to work out what will be best for you.
If your rate is up or you are looking to buy a property within the next six months, then give our advisor a call.
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