The Fixer: Should I fix my mortgage?

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Dear Fixer,
I am getting a bit worried about interest rates rising as I am on a tracker mortgage that will go up if they do.

Money is quite tight in our house at the moment and my wife and I would struggle to make ends meet if our mortgage repayments were to go up a lot.

I am considering moving to a fixed rate mortgage, but the interest rates available on these at the moment are a lot higher than the rate I am currently paying.

Would it be wise to switch to a fixed-rate mortgage now, or should I keep taking advantage of the low rate on my tracker deal?

D Mason, Nottingham

Dear Mr Mason,

A lot of people have been fixing their mortgages recently due to fears about the Bank of England starting to increase the base rate, which has been at the historically low level of 0.5% for almost five years now.

However, while a growing number of economists now expect the base rate to move upwards later this year, the change will only be very gradual as the Bank of England is aware that a big jump would tip a lot of people over the edge financially. Your mortgage repayments are very unlikely to shoot up dramatically as a result.

That said, five-year fixed rates have been rising recently - the lowest rate you can get over five years is now 2.84% (with Yorkshire Building Society), up from 2.69% last month.

And they are widely expected to keep rising. If you would be keen to have the security of knowing that your mortgage repayments will not change for the next five years, you may therefore want to snap up a deal now.

Mortgage brokers are currently recommending that people fix for five or more years to avoid their deals coming to an end just as any interest rate hikes start to bite.

Basically, you may well be able to save a bit of money now by sticking with your tracker deal, but the peace of mind you will get by switching to a fixed-rate mortgage, plus the fact that you may well be able to lock into a lower rate now that you can in six months time, may prove worth the extra cash.

The Fixer

Whatever your financial problem, write to and The AOL Money Fixer will get on the case.