With house prices cooling and interest rates rising are the popular 2-year fixed rates a risky option for some borrowers. For those with small deposits taking out a 90% or 95% mortgage there is a real risk of being trapped and unable to refinance at the end of the 2 years.
If house prices fall and you don’t have the equity to refinance you could be stuck paying the lenders standard variable rate, which is general much higher than your initial fixed rate.
When taking out a mortgage you must ensure that it is not just affordable on your initial special rate but affordable throughout the entire term.
For borrowers with a 5 or 10 percent deposits you should start to consider a long term fixed rate for 5 or even 10 years. This gives you less of a chance of your house price falling before you need to refinance again, however there are disadvantages to long term fixed rates and it is recommended you seek advice from a mortgage broker.
Call us today on 01202 937444 and speak to one of our expect mortgage brokers who will be able to offer you advice and recommendations of the best solution to meet you own personal needs and circumstances.