In the last few months, fixed rate mortgage deals have become much more popular.
In fact, according to the Council of Mortgage Lenders (CML), 69 per cent of all new house purchase mortgages in the month of April were set at fixed rates.
Over the last couple of years, variable rate and tracker mortgages seemed to be just as popular as some borrowers had the expectation that interest rates would decrease, however, as the Bank of England’s base interest rate is at the lowest it has been in its 315 year history at the record low of only 0.5 per cent, most experts predict that it is at the lowest it will go. Therefore, general expectation is that ‘the only way is up’ from here and consequently it might be a good time to look at fixing the cost of a mortgage.
It is unsurprising perhaps then that we reported only yesterday that the cost of fixed rate mortgages is increasing.
Melanie Bien, from Savills Private Finance, commented:
“People thinking of taking out a fixed-rate should not delay, but should move as quickly as possible. I think rates will go higher still.”
According to statistics from Moneyfacts, the average cost for a borrower with a 25 per cent deposit on a two year fixed rate mortgage currently stands at 4.28 per cent. For those with only a 10 per cent deposit, the average interest rate is 6.06 per cent.
