by Mark Johnston
The interest rates at which banks lend money to each other and on which fixed rate deals are based have recently been on the rise, therefore borrowers on variable rates who are considering switching to a fixed rate should get their skates on if they want obtain the cheapest deals.
Clare Francis, site editor at moneysupermarket.com, stated “with inflation remaining stubbornly above the governments 2% target, pressure is mounting on the Bank of England to start increasing interest rates”.
Therefore fixing a mortgage now during these low rates could well pay dividends in the uncertain times that are sure to follow.
The favourite mortgage of the British mortgage borrower and the most recommended by brokers is the 2 year fixed rate. However, in light of the euro zone crisis some experts believe the 5 year fixed is a better option.
Whether it is a new mortgage or re-mortgage there are various deals on the market at the moment.
Abbey have just recently launched 2 new 5 year fixed rate deals:
– A 5 year fixed rate deal for new property purchases with a 60% loan to value (LTV) at a rate of 3.99% and a fee of £995.
– A 5 year fixed rate deal for those looking to re-mortgage with a rate of 4.09% also for a 60% loan to value (LTV), again with a fee of £995.
Both new products also come with either homebuyer or re-mortgage solution. Homebuyer solution offers free standard valuation with £250 cash back on completion and re-mortgage solution offers free mortgage valuation with either free legal fees or £250 cashback on completion.
A spokesperson for abbey, said that the lender was “pleased to support intermediaries with the launch of new higher competitive 5 year fixed rate mortgage deals”.
For those who can raise a 40% deposit the Cumberland building society offers a 5 year fix at a rate of 3.84% with a £699 fee.
HSBC offer a rate of 3.99% to borrowers who have a 30% deposit with a fee of £599 or a rate of 4.29% fee free deal.
Those with smaller deposits still have some options on the market.
The Co-operative has a 5 year fixed deal for those with a 15% deposit with a rate of 4.69% and a fee of £999.
The post office also has a 5 year fixed rate for a 15% deposit with a rate of 4.70% and a fee of £995 or a rate of 4.99% with out a fee.
The thing to remember is that with all fixed rate mortgages they do have a tie in period which has substantial penalties.
At the moment variable deals are still cheaper than the most competitive fixed rate offers, however long term forecasts are becoming much more difficult to predict and therefore the decision to fix or not also gets harder.
Story link - 5 Year Fixed Rate Mortgages
Related stories to : 5 Year Fixed Rate Mortgages