Homeowner advised to take variable rate mortgage over fixed-rate

Date:Thursday 18th December 2008
Author: Rachel Fletcher

A Guardian reader has been advised by an expert to take a variable rate mortgage instead of a fixed-rate deal.

The reader, JH, is on a fixed-rate deal that terminates at the end of January.

Virginia Wallis suggested staying with a variable deal.

She noted that variable rate deals mean one cannot know what monthly mortgage payments would be in the future.

But Ms Wallis added: "If it means you would be paying less than you currently are, which may well be the case, you may feel you can live with a little uncertainty, for now."

She cited data from Moneyfacts which showed that the best two-year fixed-rate deals were between 4.49 per cent and 6.49 per cent, with three and five-year deals costing more.

Meanwhile, Nationwide is widening its selection of mortgages for existing borrowers who are moving and require a higher loan.

It is launching a new two-year tracker mortgage deal.