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Martin Lewis website advice for mortgage owners on when to fix rate as inflation rises | Wales Online
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Many people will be coming to the end of an existing deal or preparing to take out a first mortgage – so should they fix or not, and for how long?
Money Saving Expert has shared advice on whether mortgage owners should fix now or later. It comes as it was announced on Wednesday, January 21, that UK inflation had risen for the first time in five months – to 3.4% in the year to December. Here’s more:
- The inflation rate rose from 3.2% in the year to November and was higher than the predicted rise of 3.3%, with many economists predicting there would be only a slight uptick. The new figure will be disappointing for many consumers who were likely hoping for a drop following the New Year.
- The inflation rate often impinges on Bank of England decisions on interest rates which in turn affects mortgage rates. Higher inflation tends to mean higher interest rates.
- However, a number of mortgage lenders have already been reducing their fixed rate mortgage deals to as low as 3.5%, reports Money Saving Expert, founded by Martin Lewis. For money-saving tips, sign up to our Money newsletter here
- According to the website, the lowest two-year fixed rate on the open market for homebuyers is 3.5%, while the lowest five-year fixed rate is 3.69%. Comparatively, this time last year these rates were each around 4.2%. In the same timeframe, remortgage rates have also improved, the website states, with two and five-year rates at 3.61% and 3.74% respectively
- Money Saving Expert shared advice from experts about what the best option was for current mortgage owners. Aaron Strutt, of Trinity Financial, wrote: “Homebuyers now have access to more mortgage options than at any point in almost two decades, according to new industry data.
- “With the cheapest fixed rates starting from just over 3.5% and options for all types of borrowers – from the self-employed and first-time buyers to those with credit blips and those needing help from the bank of mum and dad – there has rarely been a better time to get a mortgage in recent years.”
- Aaron went on to explain to anyone wondering “how long” they should fix for that there “isn’t a huge difference between the price of two-year and five-year deals”. However, for the lowest possible fix, a two-year fix has the edge. You can view the website here for more expert opinions.
- Furthermore, Nathan Emerson, CEO of Propertymark, commented: “To witness inflation creep back upwards again will no doubt be disappointing for many consumers who will have been hoping to see a drop as we move further into the first quarter of 2026. With luck, this will prove to be a small blip in what has otherwise been a sustained downward trend over recent months.
- “However, some lenders have already started to offer more competitive mortgage deals, which should help invigorate the housing market throughout the year, alongside the general improvement in mortgage availability that has recently been highlighted by the Bank of England.
- “Should inflation continue to trend downward overall during the course of the year, we should start to see a more buoyant mortgage market, reflecting a greater degree of affordability not seen for some time. This would be very welcome news for anyone hoping to approach the buying and selling process.”
