With uncertainty over interest rates, Elizabeth Colman asked the experts what they are doing with their own mortgages . . .
BORROWERS have never been more uncertain about the outlook for interest rates — and whether they should fix their mortgage or stay on a tracker.
Warnings from the experts that inflation will increase rapidly, forcing interest rates to rise and in turn pushing up the cost of borrowing, have become a familiar refrain.
However, homeowners on low variable-rate deals may be comforted to know that even some of Britain’s top economists do not see the value in switching to a fix.
With the Bank of England widely expected to leave official interest rates on hold at 0.5% for the fifth month in a row on Thursday, The Sunday Times asked leading economists what they do with their mortgages.
Martin Ellis, chief economist at Halifax, Britain’s biggest mortgage lender, and Simon Rubinsohn of the Royal Institution of Chartered Surveyors were among those on variable deals, which rise and fall in line with Bank rate — yet neither had any intention of fixing.
Not everyone was happy to tell us about their own finances — economists at Nationwide, Standard Life Investments, Deutsche Bank and Collins Stewart, for example, were unable to take part.
Our survey found that those wanting to buy now had slightly different views from homeowners on super-low trackers.
Those looking to remortgage may have missed the cheapest deals, for now, though those who are buying still prefer to fix, according to Mark Harris of Savills Private Finance, the independent mortgage broker.
Bank of England data last week showed that the average five-year fixed-rate mortgage for borrowers with a 25% deposit rose 0.61 percentage points in June to 5.54%, adding £1,220 to the cost of a new £200,000 loan. Mortgage rates for two-year and three-year fixes also rose significantly. Here, we look at what the experts are doing with their mortgages.
