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September 19, 2007    

Mortgage experts reassure borrowers

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by Gill Montia

Mortgage experts have been reassuring homeowners about the prospects of finding a mortgage, as fears over interest rates run high.

Over 500,000 borrowers who took out two-year fixed rate mortgages between September and December 2005 will be seeking to remortgage this autumn.

Experts are keen to point out that despite the recent Northern Rock panic, there are still mortgages available below 6%.

According to David Hollingworth, of London and Country Mortgages, homeowners coming off fixed rates at around 4.5%, should prepare early as they have plenty of options to consider before ending up on their lender’s standard variable rate.

Some lenders have cut fixed rates recently and two-year fixed rate mortgages with interest rates below 6% can be obtained from Alliance & Leicester, Yorkshire Building Society, Halifax and Nationwide.

However, mortgages offering the best rates can come with high fees that may prove very costly to large borrowers, especially where the percentage-of-loan principle is applied.

Most lenders will make an offer that last for three months, giving those remortgaging later in the year the opportunity to take advantage of lower rates and fees on tracker and discount mortgages that have been introducted recently.

John Charcol is recommending Britannia Building Society’s two-year fixed rate at 5.49% as a best buy. It is available at up to 95% loan value and entails a £999 fee.

The mortgage broker is also impressed by Saffron Building Society’s 5.45% two-year discount rate, which is available for up to 80% loan-to-value and comes with a £899 fee.

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