‘Best Financial Decision You Will Ever Make’ – Secure a 10 Year Fixed Rate Mortgage | Personal finance | Finances

The Bank of England is likely to be the first major central bank to hike rates since the pandemic began, said Victoria Scholar, head of investment at Interactive Investor. “It could increase it from 0.1 percent to 0.25 percent on Thursday, November 4th.” Further rate hikes are expected, but homeowners could protect themselves against rampant mortgage inflation by committing to a long-term fixed rate.

Lucy Pendleton, real estate expert at independent real estate agent James Pendleton, said a series of rate hikes over the next 18 months will drive borrowing costs higher.

“You don’t have to be a genius to realize that getting tied to an attractive 10-year mortgage rate now could be the best financial decision you ever made.

Mortgage rates have seen a “sudden jump” in the last week and deals that charge less than one percent have all but disappeared, according to a new study by Defaqto.

Last Monday, 82 mortgages were less than 1 percent, but now it’s down to 22 and the number continues to shrink.

Two-year fixes at 80 percent LTV “rose” by a quarter from 1.24 percent to 1.64 percent in a matter of days, said Katie Brain, consumer banking expert at Defaqto.

This is bad news for borrowers after years of record low interest rates, but she added, “Interest rates are still low and there are some great offers out there.”

Mortgage brokers are pushing borrowers to sign up for fixed-rate mortgages to protect themselves as inflation drives up borrowing costs.

Barclays, HSBC, NatWest and TSB are just a few of the lenders who are raising mortgage rates in anticipation of a rate hike, and the typical borrower could be paying nearly £ 400 more a year as a result.

First time buyer Tara Clee, 25, plans to buy a house in Bristol with boyfriend George Irwin, 27, but is also cautious. “When mortgage rates rise, the search for affordable property will be even more expensive than it already is.”

Higher borrowing costs could dampen house price growth, but Tara said, “Either way, it feels like a real gamble.”

If they buy, Tara and George would get a five-year fixed-rate mortgage. “We want this extra protection because it makes budgeting a lot easier.”

READ MORE: Rate Hikes This Week: What It Means For YOU and Your Money

First time buyer James Jackson-Ellis is protected against increases in mortgage interest rates for a full decade after being pegged for 10 years.

James just bought a two bed deck in Wirral and thinks now is the ideal time to fix it before mortgage rates go up.

29-year-old public sector employee James, after consulting broker Habito, opted for a 10-year fixed rate, with Nationwide building society charging just 2.89 percent, and believes he’s already saving money .

“The interest rate on an identical mortgage has already exceeded 3.54 percent. So I am very confident that I will make huge savings over the next ten years. “

By setting it for 10 years, James doesn’t have to worry about rescheduling every two or three years, saving even more money.

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Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said there are still top mortgage deals but act fast. “The only way is mortgages, so it pays to reschedule sooner rather than later.”

Homeowners who have already taken out a fixed-rate mortgage can pay early repayment penalties if they switch early. “However, if your contract ends within the next six months, start applying for a new mortgage now to get a great deal when your current one expires.”

Before you commit to a longer term, check that your mortgage is transferable so you can take it with you when you move without paying any penalty fees.

Many deals charge a prepayment penalty of up to 6% of the total mortgage cost, so they are not suitable for everyone.

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