Expert predicts mortgage “scramble” as rates rise

Homeowners will be forced to “scramble around” for good value fixed-rate mortgages in the future as interest rates “fly up”, an industry expert has warned.

Jacqueline Thornton, financial planner at Re-Financial Planning, said householders that are currently happy to benefit from currently low-priced standard variable rate mortgages will struggle to find a reasonably priced fixed-rate deal when the Bank of England raises the base rate of interest.

Opting for a fixed-rate mortgage now is a “good idea”, Thornton said, as interest rates will get “significantly higher” as soon as economic recovery begins.

“When interest rates start rising, you will see an awful lot of people who are going to be scrambling around for fixed rates,” she said.

“The fixed rates we are going to see then are going to be significantly higher than they are now.”

Figures from independent mortgage broker John Charcol show a record take up of fixed rate mortgages in June, with 83% of its clients opting for a fixed-rate product.

However, Unbiased.co.uk recently revealed that 27% of homeowners are on a standard variable rate mortgage deal.

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