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Many fixed rate mortgages suspended or withdrawn

Following a number of interest rate rises enforced by the Bank of England a mad rush for fixed rate mortgages, a number of lenders have made a decision to either suspend or withdraw some of the popular fixed rate mortgages that have been on offer in the past, stating that there has been a mad rush for these mortgages and the funding for them has therefore been exhausted. With many people wanting the peace of mind that comes with a fixed rate mortgage, this could leave many consumers feeling concerned about their mortgage options.

The Bank of England has already raised interest rates a number of times over the past six months, taking the rate of interest from four and a half percent to five and a quarter percent, and leaving many people on variable rate mortgages struggling to meet the repayments on extremely high loans that had to be taken out in order to meet the rising cost of property purchasing. Those without a mortgage but planning to take one naturally started opting for the fixed rate option, basing their decision on the three rises in interest rates in such a short period.

However, with lenders being swamped with applications for fixed rate mortgage deals, banking officials state that all of the funding for these mortgages has now been used, and in some cases lenders have withdrawn all of their fixed rate options, whereas others have withdrawn only certain fixed rate products. According to some critics, this is unfair to consumers, as they state that lenders are anticipating further rises from the Bank of England when it comes to the interest rate, but at the same time are not providing consumers with a chance to protect themselves and make their repayments more manageable with a fixed rate mortgage.  

Tom Smith
30th January 2007


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