Fixed rate mortgages will continue to increase
An industry expert has recently stated that fixed rates on mortgages in the UK are set to continue to increase, even though the base interest rate remains at the all time low of just 0.5 percent.
Already, a number of lenders have hiked up their fixed rate deals, and if the trend continues, as it is expected to do, this could create problems for the many homeowners that may have been hoping to lock themselves into a low rate in order to ensure that they can keep up with monthly repayments and enjoy greater financial stability.
One leading mortgage broker has recently spoken out, urging consumers that want to lock themselves into a reasonable fixed rate mortgage to act quickly and start looking around before more and more lenders start hiking up their rates.
It has been reported that the cost of funding for lenders when it comes to fixed rates has gone up over recent weeks, and as a result many have had to increase their fixed rates on mortgages, resulting in higher repayments for customers that want to go onto these deals.
Earlier this month the broker stated: ‘The scale of the increase was large enough to be the straw that breaks the camel’s back and as a result I expect several lenders to increase the cost of at least some of their fixed rate mortgages over the next few days. The message for borrowers wanting to take a fixed rate is clear; get in now or miss out on the current relatively low rates.’
He added: ‘With most borrowers (including around 80% of our clients) currently choosing a fixed rate mortgage, if interest rates continue to rise then the current recovery in the housing market, which is based primarily on much improved affordability as a result of the combination of lower house prices and lower interest rates, may well wobble. The message for borrowers wanting to take a fixed rate is clear; get in now or miss out on the current relatively low rates.’
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