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Fixed rate or tracker

Journalist: Lana Clements, The Sun

ended 08. June 2023

Hello, 

I'm writing a short piece for this weekend's pages in the Sun to summarise recent changes in the mortgage market. 

I am looking for some broker comment on two issues - 

  1. People coming to the end of fixed rate mortgages - should they now opt for a tracker or fix? 
  2. Is now a good time to buy?

Looking for succinct comments to each of these questions (no more than a couple of lines please) as short on space. 

thank you

5 responses from the Newspage community

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Editor
Craig Fish
Director at Lodestone Mortgages
1. Personal circumstances and risk appetite determine this. If you want security go for fixed, if you want flexibility go for tracker.

2. If you need to buy out of necessity then yes, if it's out of choice it may pay to wait a while. But right now it's a buyer's market.
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Aaron Strutt
Product and Communications Director at Trinity Financial
With the Bank of England set to increase the base rate even higher to try and curb inflation, taking a tracker is probably not the best idea at the moment. Two-year fixes and trackers are roughly the same. The scale of mortgage price hikes over the last two weeks has been pretty relentless and there are still some big rate rises coming through. More of our clients have been taking shorter-term fixes in the hope that mortgages are cheaper in a couple of years. If you really want a tracker rate, choose a switch-to-fix mortgage so you can lock into a fixed rate without charge.
It really does depend on your individual circumstances whether it makes sense to buy or not. With the current levels of immigration and a shortage of new homes being built, many people will want to buy a home to get out of the rental sector. Others need somewhere to live because of a separation, they moved jobs or they have simply outgrown their old property.
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
1) For most people the certainty of a fixed-rate deal outweighs the potential saving of a tracker, given that trackers could just as easily cost a lot more if rates rise.

2) Buying a house is about providing a place to live, rather than an investment. For homeowners, it's nice that house prices have gradually risen over time, and that trend will perhaps continue, but this is a happy side-effect rather than the main purpose of buying.
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Jonathan Burridge
Founding Adviser at We Are Money
All predictions or forecasts prove to be wrong or lucky. So, a borrower should take a product that is right for them rather than trying to gamble on the future. Is the payment affordable? can I afford more if rates rise? is the certainty of a set payment for a set period more appealing than maybe seeing the monthly cost reduce if rates drop?

There are two right times to buy a property; now or twenty years ago. If you are buying a home its value is only relevant when you buy and when you sell. House prices rise over time. So provided the mortgage is affordable and the property provides what you need its value is irrelevant. If you dont buy now prices could simply march on past you and you may pay more for the property in the future. In the meantime, a prospective buyer will continue to spend their money paying rent and someone elses mortgage. Of course, values may fall temporarily but whats more important - security of tenure or bagging a perceived bargain?
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James Vince
Managing Director at Castle View Finance
If you need the security of payments then fix it even through your jumping on rate as the foreseeable short-term rates market is volatile. If you can handle some ups and downs on affordability then a tracker will keep you flexible in the short term ready to ponce on the right fixed rate if we see a big swing.

It's always a good time to buy! There are always great property deals to be discovered if you're in a position to buy.