Uncertainty over Brexit and the future of the economy means it is the right time to be locking your mortgage away for a long stretch.

People on tracker mortgages, their lender’s variable rate or who are coming to the end of a fixed-rate deal are turning more and more to five-year fixed rate mortgages.

According to the Financial Times, the number of house buyers choosing five-year deals has overtaken those plumping for two-year fixed rates.

This makes sense, particularly in the light of last month’s increase in the base rate, which has prompted many to fear further increases could be coming.

The Bank of England increased the base rate – the rate at which it loans money – from 0.5% to 0.75%. This was quickly followed by mortgage lenders putting up their rates by the full 0.25%.

Apart from giving you peace of mind on what rate your mortgage is going to be for the coming five years, such a move also reduces the amount you spend on administration fees, every time you switch mortgage each two years.

Once upon a time, the interest rate on a two-year fixed rate was much more attractive than that on a five-year deal. But that difference has reduced and now you can get a five-year fixed rate mortgage at just under and just over 2%, whilst two-year fixed rates are as cheap as 1.49%.

There’s less appetite for fixing your mortgage for any longer period though. Ten-year fixed rates are nowhere near as popular and that’s understandable. Whilst it’s wise to fix your rate to see out some short-term uncertainty over, say, the next three to five years, it’s best to keep some flexibility as rates might settle and come down again beyond that and you don’t want to be sitting on a 10-year rate, currently around 2.59%.

The most important thing is to keep your mortgage under review and not let it slip on to your lender’s standard variable rate or stay there if that is where it already is. That’s a sure-fire way to waste money – around £2,000 a year on a £150,000 repayment mortgage.

As with all big financial decisions, it’s best to get some advice before you choose the loan that’s right for you – many of the best deals are only available to brokers anyway. For a free, no obligation discussion on any mortgage or insurance issue, please give me a call on 07767 692653.