Homeowners' relief 'could be short-lived'
Homeowners' relief 'could be short-lived'
Tuesday 22nd July 2008
Over the last week a number of mainstream lenders, including Halifax, Abbey, Nationwide and Woolwich, have announced they are cutting the cost of their fixed rate mortgages following a fall in swap rates.
This has brought the average rate currently charged on two-year fixes down from its peak of 7.08 per cent ten days ago to 6.96 per cent, according to research conducted by Moneyfacts.co.uk.
However, Michelle Slade, an analyst at the site, predicts that this trend could soon reverse and pile pressure back on homeowners struggling to pay their mortgage debt.
She commented: "Although the average two-year swap rate is well below its peak of 6.52 per cent in mid June, in the last few days swap rates have started to edge up again.
"If this continues we could see lenders once again passing the increased cost back onto consumers."
The higher repayments being imposed by lenders have been cited as one of the key factors in a rise in the number of consumers opting for specialist debt advice and debt management solutions this year.
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