EU Referendum: Is now the time to fix and protect yourself from the uncertain times ahead?
Posted on 23 June 2016 by
After months of campaigning we finally know that the United Kingdom has made the decision to leave the European Union.
That news and the uncertainty that is likely to follow the two years of negotiation is expected to be viewed unfavourably by the financial markets. While it might be several days, weeks or months before we know what the full impact of a Brexit will be, there is a risk that at least in the short term, that banks and lenders may be more cautious in lending and it could become more difficult to get approval on a new mortgage.
So what can you do to weather the storm of the possible changes ahead?
If you’re already on the property ladder and not looking to move anytime soon then a long term fixed deal could provide the solution. Put simply, a fixed rate mortgage guarantees the amount your repay monthly over a set period of time.
Currently, most people choose to go with a 2 year fix but now could be the time you want to consider a 5 or a 10 year deal. Historically the trade-off for a longer term fixed deal was payments that were much higher compared to short term products. While a five year fix is slightly more expensive than a two year deal, rates have been so low for so long that the difference between deals has reduced and longer fixes can now provide good value for money. Crucially though, a long term fix will protect you from any rise in interest rates.
Now is the time to get advice.
Until the way forward becomes clearer and we know the full impact of what Britain’s exit from the European Union will be no one can accurately predict whether there will be a positive or negative impact on the UK housing market.
It’s important to remember that every situation is different, so it’s always advisable if you have any concerns to talk a mortgage expert about your future plans and do a stress test to see what impact any future restrictions or changes to interest rates will have on your personal circumstances.
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Categories: Long term fixed rates
The blog postings on this site solely reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.