Float to fix... Is that a strategy you would risk taking ?

With an expected 1.7m UK fixed mortgage deals ending in 2023, many are asking the same question: Should I fix, or go to variable.

The main thing to consider is unfortunately an unknown, where will rates be in 1,2,3 years time.

Here are a few other points to digest if you are considering jumping on to a variable rate, to hopefully lock in a lower fixed rate, in say 2024 or '25.

Variable rates are no longer offering a discount to fixed rates. Now that the base rate has hit 4.25% (and likely to climb more in the coming weeks), the discount has disappeared. If rates do drop in 2024 as many expect, the chance is there to ride the rate down, then jump onto a fixed rate at a more preferable level. Most variable/tracker products have no early charges attached, so this is an attraction. You will have to consider fresh lender arrangement fees if you are planning to do this.

If rates go higher than expected, so will your variable rate. The chance to then fix at a lower rate will have also gone. This strategy is for those with a risk appetite, and with available funds to cover higher costs if things don't go to plan.

Fixed rates can be taken for 2,3,5,10 years.... if you are risk adverse this offers you the knowledge of knowing exactly what your monthly payment will be. You can lock in a rate for a chosen period, and essentially forget about interest rates until the said product expires. For those on a tight budget this can be the only way to get a hold of household budgets and avoid sleepless nights.

There are many different ways to consider mortgage products, and each should be tailored to a clients needs and situation.

If you are considering mortgage products please get in touch. Initial enquiries are free and no obligation.