Five year fixed rate deals attract remortgagers

12 May 2005
Remortgagers who switch to a five year fixed rate deal could stand to make the best savings, according to new research.

Your Move's Remortgage Index shows that savings from a switch to a current Best Buy five year fixed rate deal increased, whilst those afforded by a switch to a two year discounted variable rate deal continued to fall.

The Index reveals that the first year savings achieved from switching from a standard variable rate (presently averaging 6.59 per cent) to a Best Buy five year deal on a mortgage worth £100,000 now amount to £1,290 - 5.4 times more than a year ago.

By contrast, savings made on a switch to the Best Buy two year deal remained at £1,410, the same as last month.

"Five year fixed rate deals are getting more and more attractive for people remortgaging relative to shorter term deals," comments Jon Round, remortgage analyst at Your Move.

"Lenders are enticing borrowers with better offers in an attempt to increase business. Canny remortgagers can take advantage of this."

Your Move found that the savings achieved by switching to the Best Buy two year discounted variable rate, meanwhile, have fallen by four per cent, from £1,740 last month to a current £1,670.

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