Current mortgage rates could spur need for debt management solutions
Current mortgage rates could spur need for debt management solutions
Tuesday 19th May 2009
This is because the last month has seen the average cost of a fixed rate rise and those who are thinking long-term now face the steepest rates, according to research conducted by Moneyfacts.
A worrying trend of rate hikes is emerging, according to the organisation, which has said it takes several increases for the market average to be affected.
Barnsley, Britannia, Coventry, Halifax, Newbury, Principality, Royal Bank of Scotland Intermediary mortgages, Woolwich and Yorkshire Building Society have all increased their rates in the last few weeks.
An average ten-year fixed-rate deal is now at 5.78 per cent, up 0.4 per cent on a month ago, while a two-year deal is at 4.64 per cent, up from 4.61 a month ago, Moneyfacts' figures show.
"Borrowers hoping to take advantage of this period of low interest rates and lock into a long term fixed are going to be disappointed," said Michelle Slade, an analyst at Moneyfacts.co.uk.
"In the last few weeks, swap rates for longer term deals have increased and this is being passed on through higher mortgage rates. Two year swap rates have continued their downward trend, but this is not being reflected in new mortgage rates.
She went on to state that lenders were exploiting more popular shorter-term fixed deals by "taking bigger margins" from them and added that consumers with a 40 per cent deposit could get better deals.
Nearly 60,000, including mortgages, is owed by UK households on average, according to Credit Action. The figure is only £9,280 if the house loans are taken out of the picture.
News article brought to you by Debt1 – UK debt management specialists.
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