The Interest Rate Protector

Unless you are the proud owner of a crystal ball, knowing what the future for interest rates looks like is all but impossible. Not even the most skilled economists can currently agree on what precisely the UK's financial position will be in one year's time, let alone where we will be in five years. With many people currently enjoying the benefits of an ultra low interest rate environment, especially those with a variable rate, there could well be some tough times ahead when rates eventually, as they simply have to, rise.

The most obvious strategy when you think rates are due to head north is to lock into a fixed rate, but with a big differential in price between these and their variable counterparts, it's hard to swallow.

Well, luckily, if you have a mortgage of £500,000 or above, you may not have to. There really is no need to take a fixed rate.

John Charcol has developed the Interest Rate Protector, a standalone cap, to provide a solution for those of us who wish to purchase some protection from rises, but are not prepared to commit to the expensive fixed rate route. It also provides an excellent solution for those who are unable to remortgage onto a good fixed rate because of a lack of equity in a property, tightening of lender criteria or a change in personal circumstances.

The Protector is basically an insurance product that protects against interest rates rises above a certain level. You can choose the cap level, the amount to be capped and for how long you wish to purchase the protection.

As we said, no-one really knows what the future looks like, but we do know that rates are going to have to rise at some point.  It's volatile out there.  Market sentiment still remains broadly okay for the UK currently, but this could change very quickly. As such, insuring now when prices are low, if you will allow us to be colloquial for just a moment, is simply a "no-brainer".  Protecting yourself at a mere fraction of the cost of a fixed rate just makes perfect sense.

Granted, it seems a little too good to be true. It isn't.  Call us now and find out if it’s right for you, or email contact@charcol.co.uk and we will come back to you.contact@charcol.co.uk