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When should I take out a fixed rate mortgage?

With interest rates on fixed mortgages reaching record lows, more and more people are thinking about going for these kinds of loans. But the consistent fall in rates means that many are questioning whether or not to take out a fixed rate deal now, or to wait a little bit until rates get even lower.

We’ll help you decide whether or not a fixed rate mortgage should be for you, and help you find the best deals if so.

What is a fixed rate mortgage?

When you take out a fixed rate mortgage, the interest rate you pay stays the same for a set term. This set term is usually two, three, four or five years, but, while they were unavailable between 2009 and late 2014, ten year fixes are now coming back on the market.

The main benefit of fixed rate plans is that they allow you, as the borrower, to budget accurately over a set period, safe in the knowledge that your monthly mortgage repayments will not change.

With a fixed rate mortgage, you’ll be safe from rising interest rates, potentially saving a lot of money if they increase dramatically during the course of your mortgage.

How long will mortgage rates stay low for?

Interest rates are, very roughly, tied to the Bank of England base rate, which is the rate at which the banks themselves borrow money.

Since 2009, the base rate has been at a record low of 0.5% and is unlikely to change until late 2015 at the earliest. With the base rate as low as it is, there isn’t really anywhere for interest rates to go but up, the only remaining question is when it will happen.

As of mid-2015, the decision for the base rate to go up has been delayed repeatedly but what has been consistently confirmed is that the rise will be a gradual one.

Without supernatural powers of foresight, it is impossible to ever really guarantee any time as being perfect for taking out a fixed rate mortgage but for now, while rates are low, fixing seems like a good idea.

By fixing now, you can assure yourself that you’ll benefit from great rates that are unlikely to get drastically better and if you delay the decision, there is always the chance that rates will go up. The best thing you can do if you want to work out when to fix is simply to pay close attention to the Bank of England’s monthly reports regarding the base rate and to do so while it stays low.

Compare fixed rate mortgage deals

If you do decide that fixing your mortgage rate now is a good idea, then head over to our mortgage comparison page to see what kinds of great interest rates you could be benefitting from.

By comparing fixed rate mortgages with Money Expert, you’ll be able to ensure that you’ve got your pick of some of the best plans on the market so that you can get borrowing and move into your new house right away.

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General Advice

Taking out a mortgage and buying a home is a big decision, and so you should make sure that you've got all the information you need to get yourself on the right track.

Whether you're looking to buy your first home, move to a new one or remortgage, our guides will tell you what you need to know.

Types of Mortgage

Taking out a mortgage and buying a home is a big decision, and so you should make sure that you've got all the information you need to get yourself on the right track.

Whether you're looking to buy your first home, move to a new one or remortgage, our guides will tell you what you need to know.