Fixed or Variable?


This question can seem straightforward, but there are factors to bear in mind. Here, Barlow Irvin’s Director, Gary Oxborough, explains.

If you are taking out a new mortgage, either for a new purchase or a remortgage, the decision of what type of mortgage you should go for can seem like a minefield. Over the last few years, the decision of whether to go with a fixed rate or variable rate has been straightforward for most people. While, traditionally, fixed rate deals where a bit higher than tracker or discounted rates, over recent years the difference between them has been minimal, so in most cases, fixed rates were the obvious choice. However, since the rapid rise in mortgage rates recently, the gap between fixed and variable rate deals available has widened again, with the variable rates quite a bit cheaper than the equivalent fixed rate. This means that the question about what type of mortgage deal to take is a much more in depth one now, with many factors to consider.

The Bank of England are almost certainly going to raise the base rate of interest again during the early part of 2023, which does mean that anyone on a variable rate mortgage will see their rate, and therefore mortgage payments, increase, but there is a chance that these increases will only take the rate payable on the variable rate mortgages to the same level as the fixed deals available at the moment. Of course, there are no guarantees of how much rates will rise, and they could, in theory, go higher.

Fixed rates do provide some certainty with your budgeting, and this is often a priority for many of our clients, but if total cost of the mortgage is important, it may well now be worth considering variable rates as a viable option.

The most important thing to do is to seek advice and make sure that you are fully aware of both options. As always, our award-winning team of mortgage experts are on hand to talk through the options. Get in touch to see what is best for you.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments

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The Barlow Irvin Team

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