The best mortgage rates more likely to be variable

Thursday March 27, 2008

Despite rising interest rates, fixed rate mortgages are likely to cost you more in the long term than variable rates. Unless you were able to secure a fixed rate loan while interest rates still seemed unlikely to rise much higher, then current fixed rates will probably have taken future interest rate rises into account.

Currently, the best mortgage rates are variable despite the possibility of further rises. They are generally lower than the current fixed rate of the lender, and thus you will be accruing a lower percentage of interest while the loan remains large. By choosing a fixed rate that is higher at the start of your loan, you are accruing a much higher amount due to the size of the balance. It may be lower than the variable rate in the future, but by then you will have likely been charged an incredibly larger sum of interest.

For a selection of the best mortgage rates our lenders can provide, please visit our home loans page.

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