John Charcol questions wisdom of choosing fixed rate mortgages
www.moneynews.co.uk > Mortgages > John Charcol questions wisdom of choosing fixed rate mortgages
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John Charcol questions wisdom of choosing fixed rate mortgages
Fri 8th Apr 2011
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Senior technical manager at the broker Ray Boulger suggested people may be better off on a variable rate arrangement.
In his view, the wisest thing to do currently is to overpay on such a deal, perhaps handing over between 4.4 and five per cent - similar to what people might pay on a five-year fixed rate deal.
"Overpaying while rates remain low offers the twin benefits of reducing the mortgage balance ... and softening the psychological blow when rates do rise," explained Mr Boulger.
He made his remarks after the Monetary Policy Committee announce that it is holding the base rate at 0.5 per cent for another month.
Economist at Royal London Asset Management Ian Kernohan responded to the news by suggesting the gross domestic product in the UK will not be strong enough to cope with a rate rise until at least May 2011.
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