What's your advice on rising interest rates and mortgage repayments?

Q We bought a house with a £220,000 mortgage last October and went for a flexible rate, which is currently 2.98%. We are reading predictions about interest rate rises with great interest at the moment. We could afford our mortgage if rates rise over the next few years by 3%-4%, but are wondering if we should go for a fixed-rate mortgage now, such as a five-year fix set at 4.5%-5%. It is all about when and how fast interest rates will rise over the next few years. What would your advice be? EB A The trouble with trying to predict what will happen to interest rates is that you can't. However, I would be tempted to stick with your current deal. This is partly because you say that you can afford a pretty big hike in interest rates before your variable rate would start to stretch you. And partly because if interest rates continue to not go up, as they have for quite a while now, you would kick yourself if you took a fixed-rate deal and ended up paying 2%-2.5% more in interest every month as a result. If you want to hedge your bets against future interest rate rises I suggest overpaying your mortgage to reduce the amount of the loan on which interest is charged.