Fixed-rate mortgages 'offer important cost certainty'

The additional certainty offered by fixed-rate mortgage deals can help households prepare and adhere to a budget, it has been claimed.

Paula John, editor at Your Mortgage, said that while such deals have historically not always offered the cheapest mortgage rates, they can be considered "a sensible option".

At present, the low Bank of England base rate determines that tracker deals are likely to require far lower monthly repayments, however when these rise, the situation could quickly be reversed.

"Your mortgage is likely to be your largest ever financial commitment and the advantage of a fixed rate – whatever sort of borrower you are – is that you know exactly what your mortgage payments are going to be every month," Ms John said.

"That facilitates your wider budget planning, which is more important to people these days than ever before - particularly with the threat to jobs."

For cautious buyers, especially those seeking to establish a foothold on the housing ladder, a fixed-rate may prove to be "an option worth considering", she added.

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2010-08-26 10:03:15 © Moneyextra.com