Fixed-rate mortgages ‘best when at edge of affordability’

People who are concerned about taking out a mortgage in the current economic climate may want to consider a fixed-rate mortgage, according to one institution. Fixed-rate, as opposed to tracker mortgages, may offer homeowners a greater peace of mind, especially if they are first-time buyers, moneysupermarket.com has stated.

Louise Cuming, head of mortgages at the online comparison site, commented that people in the first few years of their homebuying lives may have to stretch to the maximum of their income. In this way a fixed-rate product would be a better option, rather than go for a tracker product, which follows the national base rate of interest and may result in householders paying more if the rate rises.

For people at the maximum of their affordability, I would never suggest that they take a gamble on rates, Ms Cuming said. None of us have got a crystal ball - who would have predicted what happened last year? So, if you’re at the edge of your affordability then I would go for a fixed rate, she advised. Only 23 per cent of people in the UK would opt for a tracker mortgage, compared with 57 per cent who would go for a fixed rate, according to a Fairinvestment.co.uk survey.

People thinking of taking out a mortgage should be sure to invest in a good self-storage system for their new home.