Warning issued to anyone with a mortgage as millions of deals are 'on the brink'
30.10.2023 - 11:47
/ manchestereveningnews.co.uk
A warning has been issued to homeowners across the UK as millions of mortgage deals are nearing their end. With approximately 1.6 million fixed-rate agreements on the brink of ending, experts say anyone with this type of mortgage will be forced to 'make some difficult decisions' soon.
Fixed-rate products have been the top choice for homeowners in recent years as they offer a set, guaranteed monthly mortgage payment. But with the Bank of England suggesting interest rates may be close to their peak, the prospect of rates starting to fall makes variable rate deals much more appealing.
Also known as tracker mortgages, these types of agreements are based on the Bank of England's base rate, and can fluctuate depending on whether interest rates rise or fall. If rates are beginning to descend - this could be a good option for homeowners whose fixed-rate deals are soon coming to an end.
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Experts have now weighed in on whether or not you should switch from a fixed-rate deal to a tracker. Looking at the pros and cons for both options, a spokesperson for Arbuthnot Latham bank said: "Fixed-rate mortgages are often best for those who need or like to budget or homeowners/homebuyers with higher loan-to-values.
"They provide peace of mind with consistent payments, enabling precise future budgeting amidst the cost-of-living changes. But if the rates plunge, you are stuck paying the fixed rate and early repayment charges can incur hefty exit fees."
Talking about tracker mortgages, the bank added: "They are typically best for