Gazette Articals
Fixed Rate
It can be a daunting task deciding which is the most suitable type of mortgage for your particular circumstance, so let us begin to take a quick look at the most common options available and cover the main points you may need to consider.
The Fixed Rate. Probably the most talked about plan at the moment in as much as many people will be asking themselves whether now is the time to either take, or convert to a fixed rate. It will of course very much depend on your own personal circumstances, but the main points to consider are: Arrangement fees. Are the fees excessive? You may be getting a good rate, but if the costs involved in obtaining that rate are too great, then it may not be the answer. Early Repayment Charges or ERC’S. If you expect your circumstances to change within the term of the fixed period then the early repayment charges will need some serious consideration. Similarly if you are considering changing your current fixed of tracker mortgage to a new fixed rate, then you will need to do the maths and calculate whether there is in fact a saving, or if the ERC’S on your current mortgage, plus the costs involved in obtaining your new mortgage, actually make the change prohibitive. It is also worth noting that should you want to move properties within the fixed term, you should ensure that the mortgage is portable. A few fixed rates also have an ‘early repayment overhang’. This is becoming increasingly unusual, but basically means that a penalty will still be payable after the fixed period should you redeem the mortgage. It should, by seeking the advice of a ‘whole of market’ broker be easy enough to avoid this clause.
In the next edition we will look at the ‘Tracker’ mortgage.