Expert view: do you need a fix?

Matt Sanders, money expert
Matt Sanders - impressive marrow
"The devil is in the detail when it comes to mortgage switching, and the exit fees could end up wiping out any monthly savings"
  • | by Matthew Sanders

During the summer months it’s pretty impossible to tear me away from tending my prize carrots and cabbages out in the lush, temperate gardens of Casa Sanders.

While there’s nothing I like better than chewing the fat about mortgages, loans and life insurance in my capacity as’s resident money expert, when I get a moment spare you’ll find me outdoors, working up a sweat with my dibber.

In fact, my marrow won first prize in the village fete last year. I still recall the gushing pride I felt as the visibly impressed parish vicar pinned a first-place rosette on it and the rousing cheer of the assembled throng as I triumphantly thrust the girthsome brute aloft.

Matt Sanders with a prize marrow

Yes, the hustle and bustle of modern life means that it’s sometimes difficult to find a moment to take stock of your outgoings. But taking just a few moments to do so could mean you’re quids in. I might be an avid gardener, but I still find time to lay down my Dutch hoe and really get my fingers dirty every so often… by reviewing my finances.

If you’re a proud homeowner, then chances are your biggest single monthly payment will be your mortgage. And the good news is that if you haven’t looked at it for a while, you could potentially save a fair whack by switching, particularly if you are on a standard variable rate (SVR).

But time is of the essence.

A few weeks ago, the governor of the of the Bank of England, Mark Carney, suggested that the base rate of interest (which has been at a rock-bottom 0.5% since March 2009, when Flo Rida and Kesha’s  unforgettable pop ditty ‘Right Round’ was riding high at the top of the hit parade) could start rising soon, and continue on an upwards trajectory for a few years.

If you’re on a SVR mortgage which is linked to the base rate of interest, then now might well be the time to pounce on a low-rate fixed deal while you can.

Not only will your SVR mortgage get more expensive when rates go up, but there’s a good chance that we might start to see some of the best rates disappear in the not-too-distant future.

Even if you're already in a fixed deal and spot something with a lower rate on the market, it might be a good idea to make a switch, providing you’ve got your calculator out and worked out what you might have to pay for an early settlement and made sure that switching won’t actually cost you more in the long-run. The devil is in the detail when it comes to mortgage switching, and the exit fees could end up wiping out any monthly savings. So, be thorough and seek advice from an independent financial advisor if in any doubt.

It’s not just mortgages that will be affected by a rate rise.

What you pay for your credit card and loan repayments will also be affected too. With the 0% and low-interest balance transfer credit market currently awash with tantalising long-term deals, now might be the perfect time to strike in order to protect yourself from paying over the odds in the future.

When it comes to transferring any other debt, the same rules apply to mortgages – you’ll need to weigh up the fees to ensure that it’s worth your while.

If the numbers stack up, you could well save yourself a packet. It’s something I do regularly, meaning I’ve got far more ready cash to plough into Miracle-Gro and cloches.

Now, where did I put my lopper?