As the cost of inflation increases start to become a drain on your everyday spending, it may be time to consider looking at household bills and ways to cut them. The mortgage is often the largest monthly payment, and could easily be effected by the rise in inflation, with interest rate increases.
Considering swapping to a new low fixed rate deal could save you hundreds of pounds, especially if you have low loan to value (LTV) ratio. Five year deals have been improving recently, with the average rate for a 75% or 90% LTV falling by 0.32% in the last year.
According to Charlotte Nelson, the finance expert at Moneyfacts.co.uk, the market has been improving for five year fixed rate deals, as lenders are offering a diverse range of mortgages in an attempt to differentiate themselves from the competition.
The inflation rate has increased above the Bank of England’s target of 2% for the first time during the last four years, so homeowners will be pleased with the news that mortgage rates remain competitive.
Nelson stated that a five year fixed rate mortgage deal could help homeowners to cope with the increasing cost of living. The expert added that a five year deal would also provide certainty for homeowners, as they can budget knowing that their mortgage repayments will remain static for the next five years.
Before switching to a new mortgage deal, it is advisable to consult a mortgage adviser who has received CeMAP training, and knows which deals will be most suitable.
