Historically low interest rates have been the good news in the property market in recent years. Prices have been rising and families once again have faith in property as a good investment. The question that many households have been asking themselves is whether they have the most competitive mortgage rate, because their mortgage is likely to be the biggest monthly bill they face. Those people who are thinking about buying can do their research to find the best deals around.

It seems for the first time in a while that financial institutions are prepared to offer fixed-rate mortgages at a relatively low interest rate for a significant period. It is something that should provide a further boost to the property market. Some people may decide to remortgage and stay put; others, in the knowledge that there are more buyers around, may decide to think about moving.

Negative Equity

There were many casualties during the recession. They included financial institutions which had customers who defaulted on their loans. Negative equity resulted in them often being unable to recoup their losses. The answer to such risks is a larger deposit and those buyers with large deposits can now get some excellent fixed-rate mortgages.

There are examples of fixed-rate mortgages over a period of up to 10 years at below 4%. Historically, rates have always been above that until recent years. It is something that is worth considering – the appeal of fixed mortgage costs for a decade.

Easy to Budget

A fixed rate mortgage where there are no significant penalties for early settlement means it is possible to budget accurately while there is likely to be growth in value during such a significant period. Of course, it is necessary to look at the administrative and management fees involved in taking out such a mortgage.

It is now estimated that interest rates will not rise until later this year, and even then, by only 0.5%. While the growth in the South East of England may slow down, people looking for houses for sale in Colchester and similar commuter-belt towns have a chance of excellent rates if they have a significant deposit.

Calculate

If history is of any value, then it says that rates will begin to rise, albeit slowly. At the end of any fixed-rate mortgage it will be a matter of finding another or accepting the prevailing rate at the time. Everyone should do their own calculations but it will still be a matter of making some assumptions in deciding what to do.

During the recession many people had problems with their investment in property and some lost everything. There is now an opportunity once again both to reduce monthly costs and see an investment grow. It is certainly worth looking at, isn’t it?