Those seeking to get a reliable payment on a council house mortgage may be best served by a fixed rate loan, even though rates are at an all time high, according to experts. Although the payments on this type of council house mortgage will be higher, there is much less risk that the payments will increase in the future, leaving many council house mortgage seekers a clear choice.
“There is clearly a lot to be said for peace of mind when it comes to financial products, after all, the King of mortgage protection - the fixed rate - is as popular as ever. Yet it is because of the relatively high prices of fixed rates at the moment that this product may well find some homes up and down the country. The product would be best compared to a capped rate mortgage, but unfortunately we find ourselves with no capped rates currently available. The decision therefore rests on what your view on the future of interest rates is,” says Drew Wotherspoon of Charcol.co.uk.
“If you believe rates are going to rocket up in the foreseeable future then there will clearly be some merit in taking this product or a fixed rate, but they really would have to go up by well over 1% in 2 years for there to be value. I do not believe that this is the future direction for rates, quite the opposite in fact. This product will therefore really only suit those who currently believe rates will go down but would value having some security in the background that takes care of all eventualities.”
Related reading: Council House Mortgages
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