Money-saving expert Martin Lewis has issued advice for homeowners who may be in a deadlock deciding whether to go on a fixed or variable rate.
It comes after the Bank of England (BoE) hiked its interest rate to 4 per cent. Such a rise will have a direct influence on other rates across the country, especially how much someone will pay back on their mortgage loan.
Appearing on his ITV show, Martin addressed the concerns of a viewer whose current mortgage deal will end in December and are unsure of whether they should go into a fixed rate or go into a variable with the hopes that rates will go down.
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Before directly answering the concerns, Martin issued the following warning: "I need to be very plain. If you're under 35, you might not realise that the rates we've had since 2008 until last year - they weren't low, they were limboing well below the prior 300 year historic lows for interest rate.
"We have lived through an anomaly time. So there is absolutely no rule that says things must go back to the way they were - now I'm not saying they won't go back, I'm just saying there is no rule that they must. So do not assume and make a decision based on things will go back to the way they were."
Martin then looks at market predictions on interest rate, which generally assumes that they will go up a few percentage rates before dropping in 2024 - but not to previous levels. Martin then issued the following advice: "My view on fixed (mortgage rates) is simple.
"The closer you are to the brink of your income, the more you should be hedging towards the fixed and the more you should be heading for fixed longer."
He explains that 'riding the market' and going on a variable rate could end up cheaper if rates do go down as some preduct in the best case scenario, but it's not without its risks. Martin cautioned: "Are you willing to pay to take the risk?"
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