Martin Lewis has warned homeowners coming off their fixed deals to watch out for a “dangerous” mortgage error.
The Money Saving expert explained that there is “certain value of fixing longer” but expressed his concern for those who are not aware of what interest rates have been like historically.
“I do worry about the concept that has people saying to me, ‘I’m going to wait until rates go back to normal’ and I think that’s a really dangerous thing to say,” he told ITV. “What is tough for anybody under the age of 35 to understand is the last 15 years has been an anomaly.”
He continued: “If you look at a historic context, where rates are now is normal so there is no guarantee that interest rates will go down to those super low levels.
“I’m not saying they won’t, but you can’t say they must.”
Lewis said his best advice for homeowners is to look at their finances to see how much they can afford to put towards their mortgage each month.
“If surety is most important to you, then fix. If you have room to pay the variable rate for a few months then you might want to do that, but there is a risk things will get more expensive,” he said. “The advantage here is a mortgage charter brought it yesterday.”
Looking ahead to yet another potential hike in interest rates, Lewis added: “Rates could possibly get higher than they are.
“If you look right now, a five-year mortgage is cheaper than two-year mortgage and a ten year mortgage is cheaper than a five year mortgage.
“It’s because they predict the long-term interest rates will come down so there’s certainly value in fixing longer or relative value in fixing longer.”
