Mortgage News Fixed Rate Mortgage Rates At 10 Year High 1761
Fixed-rate mortgage rates at 10-year high
17 June 2008 / by Joy Tibbs
Mortgage expert at Moneyfacts.co.uk Darren Cook said that the average two-year fixed rate mortgage stands at 6.75 per cent, “the highest rate we have seen in the last 10 years. Customers looking to fix their mortgage for five years are also paying the price as the average rate has increased to 6.72 per cent.
“The curse of Friday 13th bought more pain for borrowers as swap rates reached a new high of 6.49 per cent. With lenders having to pay such a huge price to secure funds, and a lag time of a few weeks before this cost is passed on to mortgage customers, the situation is likely to get worse before it gets better.
“Many borrowers prefer fixed rate deals, particularly in today’s economic climate as they struggle to keep outgoings under control. However, many are likely to find this increased cost too much to bear. With the average two-year variable rate standing at 6.66 per cent, many are finding they have little choice.
Moneyfacts.co.uk claims the five cheapest standard variable rate (SVR) mortgage deals (based on a £150,000 loan) are ING Direct (UK), Stafford Railway Building Society, First Direct, Harpenden Building Society and Newbury Building Society.
Also on a £150,000 mortgage loan, it found that the most expensive SVR mortgages were provided by Birmingham Midshire Solutions, The Mortgage Business, Bank of Scotland Mortgages, UCB Home Loans Corporation and Royal Bank of Scotland.
“If the current economic climate persists, it is not unreasonable to predict that we may see a situation where a higher proportion of borrowers are on their lender’s SVR, rather than on an actual mortgage deal.
“With lenders such as ING Direct (UK) having an SVR as low as 5.64 per cent, this isn’t bad news for all customers. If the Bank of England maintains its current base rate level, or indeed drops it further, the lender’s SVR rates will become increasingly attractive.”
Mr Cook added: “Many lenders are realising that their SVR is a more viable product option in today’s market and as such, lenders including Royal Bank of Scotland, Woolwich, Halifax, Lloyds TSB and Cheltenham and Gloucester have all stopped offering their SVR to new customers.”
©Fair Investment Company Ltd