Deciding which type of mortgage to take out can be a difficult decision – especially taking the recent base rate cut into consideration. Your choice of mortgage can potentially save you a lot of money in the long run – or it could cost you more, depending on which way the base rate goes.
Fixed-rate mortgages are a popular choice amongst homeowners, since they ensure you consistently pay the same amount over a set period of time. But are they necessarily a good choice in current housing market conditions?
Advantages of a fixed-rate mortgage
Offers security. You know how much you will pay towards your mortgage every month – unlike variable-rate mortgages, which are liable to change.
Increases in the base rate will not affect your mortgage – meaning you could save money compared with a variable-rate mortgage.
Disadvantages of a fixed-rate mortgage
You will normally have to pay a mortgage arrangement fee. These are normally a few hundred pounds, but for the very best mortgage deals you may have to pay over