It’s claimed we are hitting the bottom of the fixed-rate mortgage market.
And if that proves to be the case, then you should move fast!
Wholesale market rates, (which determine the cost of fixed-rate mortgage lending) have risen from 2.96% a fortnight ago to 3.15%, prompting speculation that the current spate of fixed rate mortgages could be replaced by higher-interest ones in the next couple of weeks.
Because of this, a whole host of mortgage lenders have launched competitive fixed-rate deals in the past week or so.
One of these eye-catching fixed rate mortgages at the moment is with HSBC, which is offering a 5-year fix with a rate of 3.99% for those of you who can stump up a 40% deposit.
Meanwhile, market-leading 5-year fixes of 3.95% have been launched by Abbey and Alliance & Leicester.
Woolwich has reduced its 5-year fix for those of you with at least a 30% deposit to 4.79% with a £995 fee. It has also lowered the cost of its 4 year fixed rate mortgage for those of you with a 40% deposit to 3.99%.
Yorkshire Bank has also reduced a number of its mortgage deals yesterday by up to 0.6%, including a 2-year fix at 3.99% if you have a 20% deposit. This comes with a £999 fee.
Other recent rate cuts include Lloyds TSB's 2 year fixed-rate at 3.29%, while Nationwide has initiated cuts of up to 0.58% across its fixed-rate range.
The average 2-year fixed rate mortgage has dropped from 6.28% to 4.73% in the past six months, according to the financial website Moneyfacts.co.uk.
Other leading mortgage lenders are likely to lower their interest rates on certain deals next week but are not expected to compete with the current crop of market-leading deals.
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- Have you locked into a new deal?
Hundreds of thousands of you who have come to the end of of your fixed rate mortgages in the last 6 months have opted to sit and wait for fixes to fall before locking yourself into a new deal.
More than a million of you are currently on the standard variable rate and you are now being urged to lock into long-term fixed-rate mortgages as concerns mount that mortgage lenders will increase borrowing costs in response to rising gilt yields.
Mortgage advisers warned that although mortgage rates will not rise quickly, further decreases are now unlikely.
The average 2 year fixed rate has fallen from 6.28% to 4.73% in the last six months, and those of you on high standard variable rates of 4-6% should benefit from locking into a low fixed-rate mortgage deal now, advisers say.
Advisers say that those of you who are thinking of fixing should do so for at least five years as rates are likely to rise again in 18 months to two years' time - and if you only fixed for two years you would have to remortgage just as this was happening.
Read: Would you pay the penalty for a better remortgage?
Melanie Bien, of the broker Savills Private Finance, said:
“The cost of wholesale borrowing is expected to rise, which lenders will soon be forced to pass on to mortgage customers. We appear to be near the bottom of the market and homeowners looking for security would be wise to secure a longer-term fix as soon as possible, preferably for five years.”
“Homeowners have been waiting for fixes to fall further but the competitive rates available now are unlikely to be beaten. A cheap five-year fix taken now would protect homeowners from rate increases in the long term.”
Have you sorted out a new fixed rate deal?
No? Well get cracking then!
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