According to research by the Moneyfacts website, fixed mortgage deals lasting for three years have become substantially cheaper recently.
This makes them more affordable than those lasting for two or five years.
Although lenders tend to promote five and two-year deals heavily, they do not market their less expensive three-year options in the same way, leaving many borrowers unaware of their existence.
Moneyfacts representative Sylvia Waycot told the Telegraph newspaper that the three-year deals could be overlooked by potential borrowers, as they are not typically well-marketed or seen as “the norm”. However, they are just as valid as two-year mortgages.
Waycot added that there seemed to be no reason why fixed three-year mortgages should currently be priced lower than those lasting for two or five years. It would even make sense for two and five-year deals to be cheaper, due to their greater popularity and the fact that there is more competition to sell these products to customers. Possibly, the more expensive deals are promoted more intensively in order to increase the lender’s profits, while no attention is drawn to the cheaper options.
Currently, the best available three-year fixed rate mortgages are offered by building societies. For those who are bewildered when faced with the range of mortgage choices, it can be helpful to speak to a mortgage adviser who has successfully completed a CeMAP training course. Obtaining the right deal can make a big difference when it comes to balancing your household budget and meeting payments every month.
