When looking for a mortgage, one of the first things you look at is the interest rates offered. Of course, that sets the tone for the amount it will cost you over the life of the mortgage to borrow the money you need. Choosing a fixed-rate mortgage will give you the security of knowing the interest rates charged and, thus, the amounts that you are expected to repay. A fixed-rate mortgage repayment will stay the same throughout the life of the fix, and the interest rate charged will vary in relation to the base rate depending on the exact rates offered and the expected changes predicted for the future of the base rate. A variable rate mortgage repayment will rise and fall with changes in the base rate.

Getting the right offer for you

When base rates were trending downwards, some short-term fixed rates were the cheapest market rates on offer, with the longer fixes less desirable. Long-term fixed rates, such as those over five and ten years, offer less flexibility as base rates vary. Many fixed rate offers are accompanied by penalty charges to withdraw from the fix during the fixed term, thus making it less attractive to tie in when rates are frequently moving.

With base rates rising, longer-term fixes become more competitive, and lenders offer cheaper, longer-term rates to help customers with longer-term borrowing security. Borrowers have clarity on what they will pay over the borrowing term. Fixed interest rates may be slightly higher than variable rates offered, yet they give the long-term borrowing cost security that makes them a popular choice.

When looking for high-value mortgages and borrowing, companies such as Enness Global can offer expert advice and assistance to access markets offering favourable borrowing terms for luxury house and high-finance asset purchases for high-net-worth individuals.

Fixed-term mortgages

Now is likely a good time to take a closer look at the rates on offer as we face uncertainty going into 2023, with it quite possible that today’s rates will be desirable to those likely on offer by the middle of 2023 . Rates for fixed-term, fixed-rate mortgages are now higher than the rates we saw throughout 2020/21, so it’s important to remain realistic whether you are looking for a suitable refinancing package or a new fixed-rate mortgage on an existing or new property. Given the uncertainty with the cost of living that we are facing, you may also feel that your financial strength is better today than you expect going forward, so now is the better time to consider a fixed-term mortgage.

The best fix

The fixed rates you will likely be offered depend largely on the loan-to-value (LTV). The more considerable the amount you want to borrow, the higher the rate you are likely to be charged. Longer-term fixes over five or ten years are currently showing lower rates than shorter-period fixes.

Your overall net worth and financial position, including assets and liquidity, will also impact the rates lenders are prepared to offer. 95% LTV borrowing rates are likely to be just over 5% for a five-year term and a little under 5% for a ten-year fix. Lower LTVs offer lower interest rate charges.

Shopping the market

As with any borrowing, it is essential to shop the market for the best deals and approach lenders most likely to want to lend to someone in your financial position. Many lenders will offer their best terms and rates on high-value borrowing to those applying through a specialist luxury lending broker. This is just one of the many occasions a mortgage broker can help. Their expert knowledge of current lending decisions can ensure you don’t make what could be an incredibly costly mistake.

A mortgage broker offers a comprehensive and knowledgeable means to access multiple lending sources and achieve the best results and rates for your personal property purchase. Many lending streams prefer to liaise with a broker and offer mortgage terms that may be harder to secure with an independent application.

Secure mortgage offers early

Buying a property can be stressful, and it will undoubtedly feel more secure if you secure your borrowing offers early in the process. With mortgage offers generally being given for six months, once the offer is presented, you can lock into rates now that won’t be on offer in a few months.