L&C Mortgages has warned mortgage borrowers that waiting to fix their rate could be a risky strategy, due to an uncertain rate outlook.
According to the broker, mortgage borrowers who wait for lower rates rather than fix their deal could fall foul of further fluctuations in interest rates.
Mortgage rates fell back in the early part of this year before climbing again, and recent reductions failed to reverse those increases.
A £200,000 mortgage at the average of the top 10 lender rates for a 2-year fixed rate remortgage would cost £55 per month more now than at the beginning of February.
Mixed inflation data could put the brakes on any further improvements to fixed rates, underlining the risk that holding off could result in missing out on a keen rate.
L&C Mortgages suggested its free Rate Check service; in the first four months of the year, borrowers using Rate Check saved a total of £18.3m over their deal period by moving to a better deal when rates were falling.
The average saving from hopping to a lower rate was £125 per month, cutting the annual payments by £1,500.
David Hollingworth (pictured), associate director at L&C Mortgages, said: “It’s easy to understand why mortgage borrowers might be indecisive about securing a new deal when there’s so much speculation over when the Bank of England may cut interest rates.
“Fixed rates already reflect market expectation but continue to fluctuate as the data changes. That makes it almost impossible to second guess where fixed rates are headed next.
“The average 2 year fixed remortgage rate has increased from the low point in February to sit almost half a percentage point higher now.”
He added: “The average 2-year fixed remortgage rate has increased from the low point in February to sit almost half a percentage point higher now.
“Protecting against any ups in rates by securing a deal sooner doesn’t mean missing out on any downs, should rates later improve before your switch completes.
“Rate Check can help borrowers maximise savings while still giving surety against losing out to rising rates.”
