by Mark Johnston
The current climate of large government spending cuts, job losses and a turbulent financial sector has lead to uncertain times for borrowers. For many, having the security of knowing exactly how much their monthly mortgage payments will be is a real benefit.
This is especially true for those worried about interest rate increases. Although no one knows when there will be an increase, the only certainly is, that with rates at historic lows of 0.5%, there is only one way it can go and that’s up.
Interest rates have remained at 0.5% for the past 18 months and the worry for those looking to fix their mortgage whether they will change anytime soon. If they don’t, fixed rate mortgage holders could loose out as they would be on a much higher rate then they needed to be.
When looking for a fixed rate mortgage, most borrowers concentrate on the interest rate. Although this is important, its always worth baring other things in mind. A high arrangement or product fee can mean that a good deals turns out to be less competitive.
Those that may have the opportunity to pay off their mortgage early or who want the option to pay off a lump sum should consider what early redemption penalties as some mortgages carry hefty fines.
Borrowers that have taken these things into consideration and are still looking to fix their mortgage rate should shop around. Get as many quotes as possible and see an independent mortgage broker. A good starting point would be the mortgagerates.org.uk fixed rate best buys below.
Those with a small deposit need to work a lot harder to find a good deal. The Yorkshire Building Society is offering a two year fixed rate at 4.99%. The loan to value is 90% so borrowers only need to find a ten percent deposit and the £995 fee. For borrowers that cant afford the high fee, HSBC is offering a 2 year mortgage with a much more manageable £99 fee which has a rate of 5.09% but requires a slightly bigger deposit of fifteen percent.
Norwich & Peterborough Building Society have a three year fixed rate mortgage that requires a fifteen percent deposit too but is advertised at 3.94% with a £995 fee. First time buyers may want to check out Lloyds 4.99% new mortgage that only requires a five percent deposit but a family or friend needs to guarantee a further twenty percent.
Borrower looking for a longer term fixed rate could look at ING’s 4.34% mortgage that has a loan to value of 75% and a £945 fee to pay. The Post Office have launched a few new products recently which includes a five year fixed rate at 5.99% which has a 90% loan to value (LTV).
Those lucky enough to have a larger deposit of 25% or more can get some great deals. Santander is offering a 2 year fixed rate mortgage at 2.75% but the do charge a £1995 fee on top and require a forty percent deposit.
Mansfield Building Society are offering a three year fixed rate mortgage at 3.49% which requires a twenty five percent deposit.Alternatively, HSBC have a great 5 year mortgage at 3.94%, again with a low fee of £99.
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