I’m a mortgage expert — you should be wary of variable rate deals | Personal Finance | Finance

It’s a dilemma any homeowner who has approached the end of their tracker or variable-rate mortgage term will be familiar with.

The news that the Bank of England has cut interest rates for the second time this year – now down to 4.75% – with further falls possible, will see a lot of people leaning towards a gamble and sticking on a tracker.

But is it really as smart a move as it might seem? As always, the answer can vary wildly depending on a range of factors – many of which are completely out of the control of the mortgage holder.

A new budget, an incoming Trump administration and ongoing wars in Ukraine and the Middle East means that the only thing certain about interest rates is the uncertainty – and they would quite easily shoot up as much as fall further. A rocky start for the new Labour government has seen public confidence take a hit.

And the impact on the economy of some of the policies announced in the Autumn Budget, such as raising employers’ National Insurance contributions, remains to be seen.

But many business leaders have gone on the record to predict huge job losses coming down the line. And let’s face it, noone has any idea how Trump is going to approach his new term in office.

So if you’re one of the estimated 1.4 million homeowners facing a decision on whether to stick or twist, it might well be sensible to go for a fixed rate rather than being subject to the dramatic fluctuations that we’ve all seen over the past five years.

That way, you have the security of knowing exactly how much you’ll be paying each month for the next two, five or 10 years.

In a world of such uncertainty, there is the very real potential for interest rates to soar over the next few years, so if you fix now you could end up locked in with a much more favourable rate.

And you won’t face the prospect of having to make cutbacks to find the extra cash for your mortgage each month if and when interest rates go up.

It’s a decision to make with great care and expert advice. Signing up for a variable-rate mortgage, could pay dividends if rates keep falling over the length of your term.

Terry Fisher is a property expert at We Buy Any Home