Time to consider a Fixed Rate?

Yes, we know our blog mentioned the possibility of interest rate rises in a post earlier this month but we make no apology for mentioning it again.

Many people will potentially not have considered the effect this could have on their household budget, coming at a time when many other inflationary factors have been thrown into the national blender. VAT has just gone up, wages are set to stay at current levels at best, food and fuel prices are increasing. The price of a litre of unleaded has gone up by 1p in the last 7 days. Government cuts are going to impact and redundancies are on the cards.

Of course, it may be that the disappointing economic figures rolled out last week have the effect of keeping interest rates down, in order to help stimulate growth. At this stage, no one can say for certain what is going to happen.

An element of stability can be provided to the domestic budget by switching to a fixed rate mortgage which will insulate the borrower from rate rises for a specified period. The question to ask, is how much of a problem would it be for you if the current rate rose by 2%, or perhaps even 3%, in the foreseeable future?  Although lenders have already started to increase the percentage at which they offer fixed price deals, good rates can still be obtained.

It may be that this proves to be an unnecessary worry this year but what harm can there be in finding out whether you could get a better deal than you currently have, thereby giving yourself at least one area of financial certainty?

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