26/03/2026
MY THOUGHTS ON FIXED RATES:
Over the past two or three years, we've been told by the media, financial experts, and even the Bank of England, that interest rates were probably going to fall, with some stories suggesting this would be much, much faster than we've seen from the 5.25% in mid-2024 to the 3.75% we have now. However, the world has a funny way of throwing in a plot-twist now and then, and now we're being told to expect rate increases by those same media outlets and experts!
Whilst the Bank of England base rate isn't directly linked to mortgage fixed rates, it is definitely an influence.
So, why have I still often been recommending longer term fixed rates to my clients, despite the fact there were some forecast cuts, so they might miss out on savings?!
The reason is simple - your mortgage is very probably on your home... where you, and maybe your family, live. That's a pretty important place!
Yes, sometimes, if people have a huge capacity to cope with any interest rate increases, or they have a really small mortgage so rates don't affect it as much (say, like a little further advance "pot"), have a portfolio of properties so we can spread risk, or other situations, like a planned move or something, it can be a good thing to have a tracker rate, or a short term fixed rate... but... on the whole... my advice is not to gamble with your family home.
Yes, all fixed rates, even the longer ones of five years or more, DO come to an end, and you might get a higher rate, but, in five years, you've had more time to become more financially established, for inflation to have eroded the value of your mortgage debt, for the mortgage to have reduced, and for your income to have increased with even just inflation-linked increases.
A lot of my income comes from helping you with your re-mortgages / new-deals. Typically, I (or any other adviser - even online ones) will earn commission of:
* About 0.2% on a rate switch with your current lender, so about £200 if you owe £100,000 (Not a fortune, but, covers my costs)
* About 0.35% on a re-mortgage to a new lender, so about £350 if you owe £100,000 (A little more as it's a lot more work for me (or another adviser))
We, advisers, can also charge fees for our advice. Locally, I know of firms charging anywhere between £0 and over £1,000 for re-mortgages. My own fee is £nil for a rate switch for existing clients, and £379 for a residential re-mortgage, so I'm toward the lower end of that scale.... AND... I will generally be suggesting you take a deal which means I won't see you about your mortgage (unless you want to move or something) for five years...
I COULD suggest you take a really short term deal, and earn some more money much sooner... but... I don't do that.
My advice is, always, what I think the best thing is for you. I can't see into the future, nor can I tell you what the right thing is to do, but I can 'advise' you, and you can accept, or reject, my advice... it always comes from a good place, an experienced place, and a place that wants the very best outcome for YOU.
Yes, short term fixed rates CAN mean you save money if rates drop, but, if you can afford it at the current rate, maybe, it might often me the best idea to not risk you NOT being able to afford it in two years if the next plot twist comes sooner than we think.
Dan xXx
