With the fixed rate mortgage homebuyers were able to relax in the knowledge that for a set period of time their mortgage interest rate, and therefore their monthly mortgage repayments, would not change even if there were changes to the UK base rate. Whilst this also meant that the rate and repayment could not fall most buyers were happy knowing that it would not go up.

However, due to existing market conditions it seems that the popularity of fixed rate mortgages has declined, with a sharp fall reported in the popularity and take up of these mortgages. For over a year now the base interest rate has stood at its lowest level in the history of the Bank of England, at just 0.5 percent. With this in mind many have decided that it is no longer viable to opt for fixed rate deals.

One mortgage broker, Ray Boulger, said that today’s fixed rate deals were more expensive than they were a year ago despite the lower base rate. He also said that the percentage of clients at his firm that were taking out fixed rate mortgages had plummeted from a healthy 80 percent to a paltry 20 percent, with many realising that tracker products were the best bet at the moment.

Mr Boulger stated: “I think you will see the proportion of fixed-rates continuing to fall on the CML reports for at least the next two or three months.”

Sharp fall in popularity of fixed rate mortgages is a post from: Glitec

The interest rate cut in December spelled good news for homeowners and those looking to purchase property, as it meant that affordability was increased, albeit only slightly, although not all lenders followed suit in reducing the interest rates.

The availability of cheap mortgages and remortgages has dwindled of late due to the increased interest rates in the UK as well as the effects of the credit crunch, which has made lenders all the more cautious and forced many to put up rates. However, although the credit crunch is still wreaking havoc in the financial markets many industry experts have predicted that the base rate will be cut a couple of times before the summer, despite the fact that there was no base rate cut for January.

With this prediction in mind it seems that a number of lenders are now introducing more affordable mortgage deals, and those looking for fixed rate mortgages could even find interest rates on the south side of 5%. A number of lenders have revealed the launch of fixed rate mortgages, with rates of under or around 5%, and this could make things easier for new buyers who are already facing tough times as a result of high house prices and tight credit conditions.

According to a recent report Yorkshire Building Society, Leeds Building Society, Newcastle Building Society, First Direct and Giraffe Money are amongst those that have announced the launch of fixed rate mortgages that hover around the 5% mark. If house prices also fall over the course of this year, as predicted, and interest rates continue to fall, also as predicted, the outlook for new and first time buyers could be far brighter.

One industry official stated: “The good news for borrowers is that two-year swap rates have finally fallen under the 5% mark in anticipation of another rate cut, so fixed rates are now becoming much more competitive.”

‘Even so, trackers will prove best value for most as Bank rate is widely expected to fall to 5% or lower this year. Discounts could also prove as good value if lenders respond to Alastair Darling’s call to pass on the full discount of any Bank rate cut.’

Those looking to take out a cheap fixed rate mortgage, or indeed any other type of mortgage, are advised by industry officials to compare mortgages from a wide range of lenders in order to get the best deal, as lenders are chopping and changing their rates on a regular basis in the current financial climate. Browsing and comparing mortgages is easy, fast, and convenient these days, as it can be done from the comfort of your home and at any time of the day or night using the Internet.

However, consumers are also urged to remember that whilst cheaper rates are making a comeback with some lenders accessibility to mortgages and other forms of finance may prove more difficult because of the tighter credit conditions.

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Are Cheap Mortgages Coming Back on the Market? is a post from: Glitec