News that Northern Rock and the Royal Bank of Scotland have increased the fixed interest rates on their two-year and five-year fixed rate mortgage plans has caught the attention of financial experts and consumers alike. The change has led many to speculate if the time to get a good fixed rate on a mortgage is now a thing of the past.
While there is no doubt that the fixed rates are higher than even a couple of weeks ago, the fact is they have not reached a plateau. This means that the fixed rates offered on many mortgage packages will be higher a month from now. From this perspective, consumers may want to move ahead with securing the mortgage now and lock in what is surely to be a lower rate of interest for at least a couple of years.
However, others speculate that variable rates may eventually fall below the current fixed rate. If that does come to pass, then the borrower will end up paying more money in the long run by opting for the slightly elevated fixed rate of today.
Consumers should carefully consider current market conditions and their own ability to manage a mortgage in the event that variable rates do not perform as some project. Talking with financial advisors and considering every potential outcome before committing to a fixed rate, even one that locks in the rate no more than two years, is essential at any time, but especially important in the economic climate of today. Whatever your decision, it is one that you will have to live with for a number of years, so make sure you are happy with the course you choose.
Tags: fixed mortgage rates, mortgages, Royal Bank of Scotland
