Fixed-rate mortgages 'a personal decision'

Posted: 14 Jan 2010 10:22:58 GMT

The choice of whether to opt for a fixed-rate mortgage needs to be a personal decision, according to one finance expert.

Martin Ellis, chief economist at Halifax, says that the assessment will be "highly dependent on the individual's personal financial circumstances and their desire to know precisely what they will be paying over the next few years".

His comments come in response to the view that has been propagated by many financial advisors that some mortgage rates may rise significantly in the future due to the stabilisation of the housing market and in turn, rising Bank of England interest rates.

Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, is of this view. He expects the base rate to rise in the second half of 2009, with higher mortgage rates set to follow.

Similarly, Martin Gahbauer, chief economist at Nationwide, advises homeowners that a sensible option could be protecting against the risk of rising interest rates by opting for a fixed-rate mortgage.

On January 7th, it was decided by the Bank of England Monetary Policy Committee that the current 0.5 per cent interest rate would remain.

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