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Rate rise on the cards

06 April 2004
Portland Building Society is warning that an interest rate could be just a few days away.

"The [financial] markets made up their mind on Friday that Bank Base Rate would rise in April," says the group development director of Portland, Matthew Wyles.

"We warned mortgage customers to fasten their seatbelts after the last increase. It's not too late but borrowers who haven't acted will have to decide if they've missed the boat - the cost of fixed rate mortgages will continue to spiral upwards".

Last Friday saw sharp rises in during the day's trading. As a result two-year deals rose dramatically, to end over five per cent for the first time in almost two years.

Additionally, fixed rate mortgage pricing is outpacing increases in the variable rate sector. The best two year fixed rate in July 2003 was only 3.24 per cent. However, current best rates are all over 4.40 per cent - an increase of more than one per cent in the nine-month period.

Mr Wyles was determined in his warning: "If it doesn't happen this month, don't be lulled into a false sense of security. A Base Rate of 4.25 per cent is inevitable - it's just a question of before Easter or after Easter"

The building society is currently offering a two-year fixed rate scheme at 4.49 per cent, or an alternative fee-free option at 4.79 per cent.