Better mortgage rates start to emerge
After months of rising interest rates and even the suspension of many fixed rate mortgages from lenders due to the high demand from worried home owners and property purchasers, recent data has shown that lenders in the UK are now coming out with a range of affordable deals on fixed rate mortgages.
Just recently, a number of lenders have introduced lower fixed rate mortgages, and it is thought that more fixed rate deals will soon be available.
The drop in fixed rate deals comes after a change in the predictions for the next interest rate rise from the Bank of England. The interest rate in the UK stood at 4.5% last July, but in August it went up by 0.25% to 4.75%. In November last year the rate went up again by a further 0.25% to 5%. And a shock interest rate rise of a 0.25% this January took the rate to 5.25%.
Many experts in the UK's money markets had been predicting that the next rise in the interest rate would be 1.5%, taking the rate to 5.75%. However, this prediction has now changes, and experts think that the rise will actually be a further 0.25%, which would take the rate to 5.5%. This new prediction has in turn seen lenders drop their fixed rate mortgage rates.
James Cotton, from advisers London & Country, stated: 'There are more good fixed-rate deals on the way. If you can fix in at around 5% or below, it is a good deal. But watch out for high set-up fees.'
25th March 2007
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