Fixed-rate warning fired

Prospective home buyers have been warned that by entering a fixed-rate mortgage deal they could be adding to their future debt management difficulties.

A fixed-rate home loan protects against rises in the base rate of interest for a specified period of time, but since the next move in borrowing costs looks set to be a reduction, mform.co.uk is advising consumers to take on discount deals from their lender.

People looking to remortgage over the course of the next few months could opt for the certainty that fixed-rate deals offer, but mform.co.uk’s experts are adamant that these arrangements could prove unnecessarily expensive.

Francis Ghiloni, mform.co.uk’s marketing and business development director, said: “Our advice would be that anyone remortgaging should consider discount rates ahead of fixed rates.

“Based on true cost discount rates are already better value for borrowers but if, as expected, rates do drop next year they will become even better value.”

Since August of last year, the Bank of England has increased the base rate of interest on five separate occasions, which has added to the debt management burden of millions of British homeowners.

track

Tell others:

shortlink