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Is a two-year fixed rate deal bad news for homeowners?

According to a mortgage and protection network, two-year fixed rate deals being recommended by organisations amount to ‘poor advice’, especially when there are longer term deals available from lenders.

JLM Mortgage Services has suggested that the two-year deals may not be the best advice, due to the potential uncertainty of Brexit, as the UK will be due to exit the European Union in 2019 depending on negotiations. This will create an uncertain climate for mortgage holders whose deal is due to end at that time. According to the network, some intermediaries are recommending two-year deals to produce short term increases in fees and transactions.

The organisation states that more lenders are offering longer-term deals, although two-year products are still being favoured within the market, despite the fact that they may cost more in fees and will end during Brexit. The head of mortgage finance at JLM Mortgage Services, Sebastian Murphy, said:

“Client certainty about their monthly mortgage payments is a real want and need at present and we’re seeing lenders recognising this by offering more longer term, fixed rate deals in order to deliver that. More three-year rates are coming onto the market, some from lenders like Halifax who traditionally haven’t offered such products, and this is a trend we should all be encouraging.”

Mortgage advisors invest in their careers with CeMAP training in Manchester and other cities, so that they are fully able to provide the most suitable advice for clients. This includes recommending a longer-term deal where appropriate.



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