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Is this the time to stick with variable rates?
A leading index on the mortgage market this week identified a rise in popularity of the amount of borrowers who are choosing to remain on their lender's standard variable rate (SVR) at the end of their existing mortgage deal.
In October, just over a quarter of all new mortgages were for fixed rates. In the summer, as much as 4 out of 5 mortgages were being taken on fixed rate deals.
Tony Rice, of specialist mortgage and insurance brokers TMP Mortgage Zone, said: "Indications from leading analysts, and the Bank of England's own announcement this month that it would extend the quantitative easing programme, would suggest that the base rate is unlikely to rise over the new few months. As a result, many borrowers are adopting a "wait and see" approach as the deals they can get on their lender's SVR are often significantly cheaper than many of the current fixed rate deals on the market. Of course the danger is that once the interest rate does start to rise, so will the interest on fixed rate deals. Borrowers looking for complete security should still consider looking at fixed rates across the mortgage market amongst their options if their current deal is due to expire any time over the next 6 months."
[ 19-11-2009 ]
