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Sunday 29th of March 2009
January 22, 2008

Fixed-rate mortgages cost less


by Gill Montia
”Fixed-rate

Mortgage broker, John Charcol, has broken ranks with housing market pessimists and announced that those looking to move house or to get a foot on the property ladder may be able to take advantage of falling house prices and lower mortgage rates.

The broker can confirm that fixed-rate mortgage products are costing less, while latest figures from Rightmove show that property prices have fallen for the third consecutive month.

John Charcol spokesperson, Katie Tucker, says: “The good news for borrowers is that two year swap rates (on which lenders base fixed-rate prices) have finally fallen under the 5% mark in anticipation of another rate cut, so fixed rates are now becoming much more competitive.”.

Lenders including Woolwich, Lloyds TSB, Intelligent Finance and Cheltenham and Gloucester have recently reduced fixed rates by around 0.15%.

Tracker rates have increased by approximately the same amount but could continue to offer good value, if the base rate falls to 5% or less during the coming year.

According to Ms Tucker: “Tracker mortgages are more popular at the moment. Some are offering very low rates for a percentage fee, which can be confusing, so have your broker calculate which mortgage deal is best value for your personal situation.”

Meanwhile, the Rightmove House Price Index shows a 0.8% (£1,968) drop in average asking prices in January, as compared with December.

The decrease gives an average annual rate of increase of 3.4%, the lowest since December 2005.

Rightmove Commercial director, Miles Shipside, comments: “Enough sellers seem to have dropped their prices to encourage potential buyers to look in larger numbers, suggesting we might see a more active market at this lower price level.”

  • Fixed-rate loans continue to rise in cost
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  • Fixed rate mortgages still attractive
  • More buyers choose fixed-rate mortgages
  • Trackers recommended above fixed-rate mortgages
  • Fixed-rate mortgages retain popularity
  • Nationwide cuts interest on fixed-rate mortgages
  • Expiring fixed-rate mortgages could mean substantial increases in payments
  • Government action needed on long-term fixed-rate mortgages
  • Cost of fixed-rates loans hits ten-year high
  • Discuss this in the Finance Markets forums

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