Fixed Rate Mortgages Set to Rise in UK
Mortgage borrowers on variable rates who are considering switching to a fixed-rate mortgage should get their skates on if they want to catch the cheapest deals, mortgage brokers are warning.
Although the Bank of England announced yesterday that the base rate will stay at a historic low of 0.5% for the 22nd consecutive month, swap rates - the interest rates at which banks lend money to each other and on which fixed-rate deals are based - have risen for two-, three-, five- and 10-year terms in the past week and stand at their highest point since last April.
Andrew Oulsnam, Managing Partner of Robert Oulsnam & Company commented this indicates that banks expect the base rate to rise, and that when current fixed-rate deals run out lenders will have no choice but to bring out higher fixed rates.
"There has been a significant shift upwards in the last week and a couple of lenders have withdrawn their fixed rates with others expected to follow. It is perhaps too early to indicate a trend, but nonetheless borrowers who are sitting on the fence need to pay close attention."