Four reasons to lock into a cheap fixed mortgage today - Telegraph.co.uk

Four reasons to lock into a cheap fixed mortgage today – Telegraph.co.uk

Mortgage rates in the United Kingdom have been dropping for years, due to a low Bank rate, combined with competition from banks. Now, however, mortgage rates may be rising in the near future. Thus, it is recommended that borrowers secure a fixed rate mortgage now in order to escape higher interest rates. There are four indications of rising rates. First, swap rates are rising. Second, inflation is heading above the Ban of England’s 2% projection. Third, political uncertainty over Britain’s exit from the EU may affect rates. Finally, the chancellor’s budget threatens to decrease personal incomes, thus affecting mortgage rates.

Key Takeaways:

There are several signs that mortgage rates will rise in the near future.
Usually two year fixed rate mortgages are chosen by most borrowers. However, five and even ten year deals are available and their rates are currently not much higher.
Political uncertainty, looming inflation, and the fact that some mortgage raise have been increased already, it’s prudent to go for a longer term fixed rate.

“Those who have not yet switched to a fixed-rate deal should act quickly.”