The general consensus seems to be that mortgage interest rates will increase and it is just a question of when will this happen, says Dale Jannels, managing director of Atom.
He says many have been predicting an increase for the last five years, but this is yet to materialise and may not for a period yet. However, by the time the Bank of England base rate increases, Mr Jannels says fixed rates will probably have already increased.
So for the risk adverse customer, Mr Jannels says a longer-tem fixed rate is probably a good deal at the current time.
He adds: “For those with a little more adventure, then a shorter term deal may be more beneficial.”
David Hollingworth, associate director for communications at London & Country Mortgage, says the rate at which rates increase is harder to gauge and few would have anticipated the Bank of England base rate would still be at 0.5 per cent after six years.
He says it is difficult to second guess rates though and the Bank of England has been clear that increases could be very gradual when they do come.
Nonetheless Mr Hollingworth says with some long-term fixes dipping below 3 per cent recently the client is buying in at a low.
Mr Hollingworth says: “They are unlikely to feel that they have been left high and dry in the future but will ultimately need to reach their own decision on whether it will suit their needs.”
Martin Reynolds, chief executive of Simplybiz Mortgages, says his personal opinion is that the base rate will not move until potentially early 2016 and then will be a gradual increase up to 2 per cent over a couple of years.
He says Libor can move about a little bit more, but tends to follow a pattern as an early indicator as to where the market feels Bank base rate is moving.
Mr Reynolds says: “I am confident that advisers are already factoring this into their conversations with their clients.”
