Martin Lewis says he is concerned about a dangerous mistake some people could be making with their mortgage decisions. It comes as the founder of Money Saving Expert quizzed Chancellor Jeremy Hunt on his ITV show on Tuesday night.
Earlier in the day Martin had appeared on Good Morning Britain to discuss the current mortgage situation. Average two-year fixed mortgage rates jumped to a 15-year high on Tuesday.
GMB host Ed Balls asked Martin what people should do if they are unsure about mortgages, saying : "Right now, if I was coming off a fixed-mortgage, I'd be rather wary of another fixed now... and I'd go for variable for a while, would that be a wise thing to do?"
Martin said of people going for a variable rate and waiting for rates to drop: "I think that's a really dangerous thing to say."
He added: "What's tough for anybody under the age of 35 to understand is the last 15-odd years from 2007 onwards of super low interest rates is the anomaly. If you look in a historic context, the rate we have now is the norm roughly for the prior 300 years.
"We've now had a 15 year anomaly so there is no guarantee that interest rates will drop down to those super-low levels. That is not the same as me saying they won't but you can't say they must."
Martin added: "If there is a fix out there that you can afford and it gives you surety that you know exactly what you want to pay and that surety is most important to you than fix. If you've got room to pay the variable rates for a few months then you may want to do that but there is a risk things can get more expensive."
The typical two-year fixed-rate residential mortgage on the market reached 6.66%, up from 6.63% on Monday, Moneyfactscompare.co.uk said. The last time two-year rates were higher was in August 2008.
On October 20 2022, the average two-year fixed-rate mortgage hit a peak of 6.65%, amid the market volatility which followed September’s mini-budget. Moneyfacts said the average shelf-life of a mortgage is just 12 days – the lowest since its records started in November 2011.
Previous low points were reached in January 2023 and October 2022, when mortgages remained on the market for 15 days on average.
The Chancellor took questions from Martin Lewis on his ITV show on Tuesday, as he defended the Prime Minister’s previous use of the phrase “hold our nerve” amid rising interest rates.
Hunt said: “I think the Prime Minister’s comments was taken out of context. It was never advice for an individual person making a decision about their mortgage. He was really saying what our approach as a government is… and to say we shouldn’t be defected from the course of action that we know will work.”
Asked if more practical help could be coming, he pointed to ongoing work by the Financial Conduct Authority looking into how rising interest rates can be passed onto savers.
He added: “If you have other ideas, you should tell me but we are not by any means saying that this is the end of the story.”
Bank and building society bosses appeared before the Treasury Committee earlier on Tuesday, to explain what they are doing to support customers.
Around 2.4 million fixed-rate mortgages are due to finish between now and the end of 2024, according to figures from trade association UK Finance.
The Office for National Statistics (ONS) revealed on Tuesday that average regular pay, not including bonuses, was 7.3% higher in the three months to May compared with the same period last year.
