Should I fix my mortgage?
Experts predict interest rates will rise this year, so is now the ideal time to fix your mortgage?
Interest rates look set to rise any month now as inflation sits at double the government's 2% target. So if you've got a mortgage is now the time to fix?
Homeowners have had an easy ride over the last few years as mortgage rates hit all time lows. But as soon as interest rates start increasing borrowers with variable rates will see their costs go up.
A fixed rate mortgage is great if you like to budget and want to be sure that your repayments won't change.
But, the downside is that you pay for that security. Fixes are significantly more expensive than variable mortgages and interest rates would have to rise by at least 1% for those on fixed deals to start paying less than those with variable rates.
Essentially you're taking a bet on how fast you reckon rates will rise – but we think the speed of increase will be slow and there may only be a half point hike this year.
But if you still think a fix is right for you, act fast. All the hype surrounding interest rates and inflation is pushing up the cost of fixes and the best deals are disappearing.
And remember, when you're shopping around, don't just focus on rate – factor in arrangement fees too which can be as much as £2,000.
To find the best deal for you speak to a mortgage broker or check out our round up of all the best buys in Moneywise.co.uk's mortgage round up.