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Borrowers advised to 'act now' to secure low mortgage rates

28 October 2003
Consumers are being advised to act now in order to secure low interest rates on fixed-rate mortgages.

Many lenders have already re-priced their deals as analysts predict a rise in interest rates next month.

Coventry Building Society and Britannia Building Society became the latest lenders to re-price their fixed-rate mortgages on Monday.

Coventry removed one of its fixed-rate products altogether and Britannia raised its two-year fixed rate mortgage to 3.99 per cent and its 10-year fixed to 5.29 per cent.

The larger mortgage providers such as Halifax and Woolwich have already re-priced their deals to 4.25 per cent and 4.49 per cent respectively. Alliance & Leicester, Cheltenham & Gloucester, Bristol & West and Portman have also re-priced and the remaining lenders are expected to follow suit, the Financial Times reports.

Most borrowers are faced with the choice between a fixed-rate deal or a discounted mortgage. The majority of discounts run for five years and are linked to the lender's standard variable rate (SVR). Analysts advise comparing mortgage prices for both fixed-rate and discounted home loans before making a decision.

Homebuyers also have the option of selecting a tracker or discount deal with no early redemption charges or a "drop-lock", which allows the borrower to drop onto a fixed rate deal at a later date, without incurring a penalty.

Recent advice issued by the Council of Mortgage Lenders called on consumers to plan ahead for higher borrowing costs.