06/02/2008
Much has been written by commentators about the problems facing people finishing the rates they signed up for 2 years ago, but there is evidence mortgage holders are taking action too late.
There is no doubting that when the industry had rates such as 3.99% & 4.29% these were snapped up by customers looking to make their new house purchases as affordable as possible, however these rates are now finishing and seeing as the Bank of England base rate is nearly 2% higher, what does this mean?
Well the good news is that the base rate seems to have peaked, was reduced recently and could perhaps fall again next month.
The credit crunch has seen a number of firms withdraw from parts of the market especially the riskier end of sub prime (low credit score), however this has left them either in the market looking for quality or waiting to get back in the market as things settle down.
So what to do if you have a rate finishing?
Should you sit on your hands and wait for rates to fall before acting? Well that depends on when your mortgage goes onto the Standard Variable Rate (SVR). The SVR of your lender will typically be 7%-7.5% or the best part of 3% higher than your current rate – can you afford or want to pay that? And if you do, how long will it take you to recover the extra cost if (and it is only an if) fixed rates continue to fall? It depends on your appetite for risk; risk involving what for most people is by far the biggest monthly bill.
So if that is not for you, you can sit in front of the computer like you are now and pile through websites searching the best deals or better still you can get someone to do it for you, free of charge .
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