Wed 16th Jan, 2008
Are fixed rate mortgages a thing of the past?
A brief look at the UK mortgage market will show that less and less fixed rate deals are being offered by banks to customers. Added to this is the fact that many of the deals that are offered look extremely unattractive to borrowers because the rates are just seen as being too high. However, research shows that the best fixed rate loans are not that far higher than the variable rate deals and there are still some good deals out there to be had. The problem is that these deals are often only offered for a very short period by the bank and customers are not having the time they need to take up the offers.
Another issue with the fixed rate deals that are available is that many of them are charging very high fees. It looks as though if you want a fixed rate mortgage these days, you are going to have to pay a hefty premium just to get your hands on one. Most fixed rate home loans are also charging fairly punitive early redemption fees so if you think that you are going to be moving again in the near future, or want to have the choice of re-mortgaging your home when rates are lower, the option may not be open to you.
The best advice is simply to decide very carefully what type of mortgage you need, and not simply chase the lowest rates. If you cannot afford the risk of another rate rise, then opt for a fixed rate, even if it means paying high fees.