In late June 2014, Halifax Intermediaries announced that they were launching a new range of five-year mortgages. This move came at the same time that the group released research showing that 62 per cent of their fixed rate mortgage loans in 2013 were two-year deals.
The research also told us that 34 per cent of customers looking for a fixed rate mortgage opted for something in the four to nine-year bracket. It seems, then, that this decision to offer more five-year mortgage options is a wise move from Halifax, with longer-term mortgages evidently gaining popularity.
Why is it, then, that so many of us are opting for the fixed rate mortgage? A man who should know, the Bank of England’s Mark Carney, has offered us an explanation. Mr Carney has recently warned that rate rises “could happen sooner than markets currently expect”.
Nigel Bedford, a senior partner at Large Mortgage Loans predicted that this rise would see an increase in the demand for longer-term fixed rate mortgages. Halifax’s researchers might not have envisaged Mr Carney or Mr Bedford’s sentiments, but it certainly seems like the trend towards a longer term fixed rate mortgage is going to continue to grow over the next year.
Facts and figures are all well and good you might be thinking, but what does all of this jargon actually mean? Should I be thinking about swapping rates? How can I make the right decision when it comes to either a first time mortgage or a remortgage?
It can seem like an overwhelming task, and as the cost of the fixed rate mortgage has already begun to rise since Mr Carney’s statement, it can be tempting to panic and go for the first offer you find. This is understandable, and acting quickly to secure a good deal is perfectly reasonable. However, it’s important to remember that there are a multitude of options available to you, and that the longer term fixed rate mortgage simply might not be the best one for you.
In order to get the best deal possible, it’s much more effective to seek out professional advice from experts who know the market. Homeline Mortgages will be able to help you find a plan that is perfectly tailored to your needs, saving you both the stress of searching around as well as ensuring that you get the best possible deal. Contact us today, and we’ll be happy to help.