Gerry Bell is head of mortgage marketing for GE Money Home Lending
"Many consumers who set their mortgage loans at low fixed rates two or three years ago are now faced with the tough task of judging whether to move onto a new fixed rate in the current uncertain market climate or wait for possible declines in the Bank of England Base Rate.
"Surprisingly, the Base Rate was not cut by the Monetary Policy Committee in January. However, this will add more pressure for a potential cut in February or March.
"According to research from GE Money Home Lending, mortgage intermediaries expect the Bank Base Rate to fall throughout 2008, with the majority expecting it to fall to between 5.00 per cent and 5.40 per cent, with some predicting a drop to below 5.00 per cent.
"In this a climate, discounted product rates are likely to become more and more popular throughout the year as consumers and mortgage intermediaries follow a potential downward move in the Base Rate."
Roy New is a London-based sole broker
"Clark is one of many consumers who over the next coming months will be coming off a very good fixed rate arrangement into an uncertain market. To fix or to obtain a discount or tracker rate? That is definitely the question.
"I personally feel that, even with the uncertainty of the market at this present time, a discount or tracker rate is the best option. The market will certainly re-adjust in a downward motion over the next 12 to 24 months and, if you are held in a fixed rate, you will not be able to enjoy the benefits that downward cuts will bring.
"There are some nice rates out in the market, obviously subject to loan-to-value, income, product fees, and early redemption charges.
"The Co–operative Bank has a 5.24 per cent discounted variable rate for a year, a 0.26 per cent discount, reverting to Base Rate plus 0.49 per cent for remainder of term, with a £599 product fee and a two-year early repayment charge at 3 per cent."
Tony Davis is executive director at Mortgage Meadow
"More important than the consensus on rate movements is considering what is right for Clark’s situation.
"For example, since he had originally opted for a fixed rate, his attitude to risk needs to be properly re-assessed – has his view been tainted by media hype?
"If a remortgage is required, how does a new deal compare to one which his current lender will offer in terms of remortgage costs and – for repayment mortgages – loan re-amortisation?
"In this regard, both the loan size and how far into the repayment term Clark is, can affect costs. While economic outlook is important for context, it is considerations such as these which illustrate the case for an individually assessed approach.
"Most importantly, if a switch to a variable rate mortgage arrangement is decided to be the best course of action, then Clark must be clear that one can only offer opinion on the future of interest rate movements and not actual advice."
