Fixed Rate Mortgages Going Going Gone
16 June 2009 / by Rachael Stiles
Some mortgage experts are saying it is already too late for homeowners to get their hands on the most competitive fixed rate mortgages, and moneysupermarket.com is urging them to fix now or lose the opportunity to get a good deal.
“Fix now or forever hold your peace,” moneysupermarket.com is warning homeowners who have yet to move onto a fixed rate mortgage deal, as interest rates are about to rise.
Rising swap rates mean that costlier fixed rate mortgages are on the horizon, moneysupermarket.com predicts, following several years of falling rates.
While the Bank of England has kept interest rates at 0.5 per cent again this month, where they have been since March, it is widely expected that they will not fall further, and that it is only a matter of time before rates start to rise again, pushing up mortgage rates.
Two years of falling fixed rate mortgage rates are about to come to an end, says the financial comparison website, and they are set to become less competitive again as lenders start increasing the cost.
“For a while now many people have been waiting to pounce once we reach the bottom of the mortgage market,” said Louise Cuming, head of mortgages at moneysupermarket.com, and “it seems that time has come.”
Increased swap rates – the rate at which banks lend to each other – are on the rise, and these costs will be passed onto the mortgage customer, Ms Cuming said, noting that two year fixed rate mortgages have already been affected.
“Borrowers looking to fix should lock in quickly, before the next tranche of mortgage products come through showing drastically increased rates,” Ms Cuming urged. “Borrowers might also consider fixing for a longer period of time, say up to five years. If the Base Rate climbs back to mid 2008 levels, fixed rate deals might be going up for some time.”
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