It may be a good idea for house-hunters to take out a fixed-rate mortgage while the base rate is still at its lowest, advised an industry expert.
Paula John, editor of Your Mortgage, pointed out that it may in fact be "very sensible" to secure a fixed-rate deal now rather than later.
Although the schemes do not offer the cheapest rates available in the market, Ms John argued that these are still worth considering when shopping around for the right mortgage product.
"Your mortgage is likely to be your largest ever financial commitment and the advantage of a fixed rate – whatever sort of borrower you are – is that you know exactly what your mortgage payments are going to be every month," she said.
She pointed out that this would help people to plan their finances in advance, taking into account possible crisis situations in the future such as losing employment.
Her comments follow in the wake of recent statistics made public by the British Bankers' Association (BBA), which revealed that the number of new house purchases approved in July dropped to 33,698. The figure had declined compared to the number of house purchases sanctioned in June, which amounted to 34,575.
It was also found that the total mortgage lending in July this year grossed £8.4 billion, which was slightly lower than the previous six month average of £8.6 billion. House prices dropped slightly to £148,500 in July, but were still higher than that recorded in the same time period a year ago claimed the BBA.
Recently, Ray Boulger, senior technical manager at the firm, pointed out that lenders increasing the costs of their tracker-based products would boost the appeal of fixed-rate mortgages.
He said: "Although I think trackers generally still offer better value, you can certainly make out a much better case for buying a fixed-rate now because the gap between trackers and fixed-rates has narrowed and fixed-rates are looking better value – particularly five-year fixed-rates or longer term fixed-rates generally." |
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