The importance of a good mortgage deal

Today, for the 14th consecutive time the Bank of England have opted to increase the base rate. That’s bad news for homeowners who have a fixed rate mortgage due to expire shortly, are on a variable rate where their repayments are linked to interest rate movements or are looking to re-mortgage.

So, what can you do?

If you have a fixed rate mortgage due to expire in the next few months or are on a standard variable rate, there’s a potentially tough dilemma coming up. Do you opt to move onto/stay on a variable rate, with the aim of benefitting from interest rates falling in the future? Or do you move onto a fixed rate option, which may mean cheaper repayments now but could see you locked in a more expensive deal if rates do indeed fall?

There might also be fees involved with taking out a mortgage product, which reduces the overall value for money a particular deal might appear to offer. If for example you signed up to a longer-term fixed rate deal that doesn’t suit your interests, you might be stuck paying higher repayments, if and when rates go down.

Whilst recent events underline the risks of relying too much on long-term interest rate forecasts, experts believe base rate will start to fall in 2024 and especially by 2025. ING, for example, project base rate will be 2.5% by the end of 2025. (

Against this backdrop, locking into a fixed rate deal – even for as short as two years could see you miss out on better options when rates begin to fall.

These are decisions that could cost you hundreds of pounds a month and its why getting advice on your options is a worthwhile consideration.

The value of an expert

To give yourself the best chance of making the right choice, its worth sitting down with an adviser to assess your options. They can help you to look at your financial situation and capacity to see if you might be better fixing or being on a variable option.

For example, if you want the security of knowing exactly what you’re paying for each month, a fixed rate deal might be a more suitable option for your personal circumstances. If you could afford to pay a little more, you might prefer to be on a variable rate, knowing you can absorb the added cost of further rate rises.

Ultimately an adviser can give you the personalised recommendations and crucially research the market for the most suitable deals for you. As advisers sometimes have access to special products from lenders which aren’t available directly to the public, and with 5000 products to choose from it can really pay off to ask them to do the hard work for you and find you a better option.

If you would like to speak to an Independent Financial Adviser about your pension please do get in touch:

Affinity Financial Advisors Ltd, High House, Harlington Rd, Uxbridge UB8 3HX

T  |  01895 810134  E  |

Affinity Financial Advisors Ltd are authorised & regulated by the Financial Conduct Authority.

*Your home may be repossessed if you do not keep up repayments on your mortgage.


Recent Posts