The great fish and chips debate

On the way home from work the other day I passed my local fish & chip shop, nothing unusual about that you might think, however the difference was it was closed. 6pm on a Friday night and it was shut. Closed for re-decorating, the sign in the window said. 

My mind started to wander, thinking about all the people whose regular Friday night routine had been turned upside down, forced to go elsewhere or even go hungry. This simple observation makes you realise how you take things for granted and the value you put on peace of mind.

This question has never been more relevant than it is at present, with the current mortgage debate –‘To fix or not to fix, that is the question’.  With interest rates being as low as they are and lenders offering competitive longer term deals, has there been a better time to fix your mortgage payments? 

Here are a few things to consider when looking at your mortgage options:

  1. Will I move house within the term of the deal? If so, then maybe a five year deal might not be the right option; look at two or three years instead.
  2. What are the fees involved? Most fixed rates carry a booking or arrangement fee, but these can vary so take time to look at these in detail. Can they be added or do you have to pay them upfront? Remember, if the fees are added you’ll be charged interest on that amount too.
  3. How important is the level of deposit? Again, deals vary, but as a rule of thumb deposits need to be in 5% multiples, starting at 10% then 15%, 20% and so on.  Lenders reserve the very best rates for 40% deposits or more, so bear this in mind when looking at your deposit.
  4. All that glitters may not be gold. Always take an overall picture of any deal, do not be seduced by a headline rate only to find the fees are too much, or the lender’s criteria is unsuitable.
  5. Get independent advice on how best to structure your mortgage. This will often pay dividends in the long run, not just for this deal but any follow on deals.

So don’t take your mortgage for granted, it’s probably your most significant outlay on a monthly basis. Getting the right deal can make a big difference.

Steve Hardaker, Property Finance Consultant

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