Mortgage Interest Rates will Start to Rise

(MMD Newswire) March 26, 2009 -- It's inevitable interest rates will start to rise at some stage, but when and how quickly is something even the experts can't agree on. Fixed rate mortgages are low, particularly for those with at least 25% equity, but will they/can they get any cheaper? Tracker mortgage rates mirror any change in bank rate, but with mortgage lenders increasing tracking margins, and with bank rate at 0.5%, have you missed the boat? Unusually, standard variable rates may also look attractive, but are lenders passing on any change in interest rates, as they struggle to retain savers? If you are unsure what to choose, here are some L&C tips on how you could hedge your bets. A mix and match mortgage is where you take part on a variable rate and part on a fixed rate. This gives you some security but will also mean you don't completely miss out if rates fall again. The downside is that you're likely to pay an arrangement fee for both schemes. Drop lock mortgages, offered by lenders such as Halifax, Nationwide and C&G, allow you to take a tracker deal, but switch to a fixed rate in the future without penalty. This might seem the perfect solution but timing your switch will be tricky, and is likely to involve your...