In times of political uncertainty it’s difficult to second guess what is going to happen to the economy, which makes it equally difficult to say what to do with your mortgage.
On the one hand people looking for certainty and stability might be tempted to plump for one of the increasingly attractive fixed-rate deals to weather whatever storm is coming.
And who could blame them, as the post-Brexit financial upheaval might make the latest raft of fixed rate deals look very tempting indeed.
Nationwide, for example, has cut mortgage rates by up to 0.25%, and is now offering a 60% loan to value ten-year fixed rate at 2.99%. They also offer 3.09% on 70% and 3.39% for 75%.
The Newcastle Building Society has launched a 10-year mortgage at a fixed rate of 3.29% for up to 80% loan to value, with no fees.
As with so many things, it’s a judgement call. Some are predicting that there could be a cut in interest rates around the corner, to protect the UK economy, in which case it might be worth holding off for a short time to see what happens. Mortgage lenders are not too keen on further cuts, fearing they would reduce their margins and possibly harm savers.
And certainly longer-term fixed rates look potentially more attractive than, say, a two-year deal, which could potentially be coming to an end just as the UK leaves the EU, with all the upheaval that might bring.
The Nationwide’s five-year fixed rates now start at 2.19% for 60% loan to value, whilst for 95% mortgages, you can get a five-year fix for 4.69% and three-year for 4.39%.
In the buy-to-let sector, The Mortgage Works is also offering a new 10-year fixed rate product, currently the only 10 year deal for landlords on the market. It is available up to 75% LTV at 4.99% with a £995 fee.
If you’re looking for a fixed mortgage with a real headline-grabbing rate, then HSBC has got a new two-year fixed at just 0.99% for up to 65% and a maximum of £500,000. It does have a sting in the tale, however, with a fee of £1,499 – so you’ll need to see whether that fee offsets the savings you’ll make, and that will depend on the size of your loan. Again, that will end in two years’ time, when things might look very different indeed in terms of the UK economy.
Fixing something for a period – however long or short – will always carry the risk that you end up paying more than others do if rates fall. After all the penalties for getting out of fixed rate mortgages can be significant.
But if its security and peace of mind that you value then get yourself in a fix!