Latest News
Credit Crunch Affects UK Mortgages
According to reports in The Times this week, the impact of the global credit crunch is now being felt by UK mortgage holders.
The previous popularity of two-year fixed rate mortgages is falling rapidly as borrowers coming to the end of their deals are finding that they have to pay thousands extra to renew, even when they have good credit ratings and history.
The credit crunch has meant that many banks are raising their interest rates, tightening lending criteria and withdrawing products all together. And with 1.4 million homeowners coming to the end of their fixed-rate deals this year, that is when the cost of the financial market turmoil is going to hit home.
Tony Rice, from Bedfordshire-based specialist mortgage brokers TMP Mortgage Zone said: "In 2006, my clients were able to secure a two-year fixed deal at a cost of around £400. In the current market, they would be looking at a cost from the lender of around £1,000 for the same product ."
TMP Mortgage Zone is finding that many customers are preferring to choose tracker mortgages whilst there is so much uncertainty about where interest rates are going in the short to mid-term. However, longer fixed rate deals are still popular, especially as the arrangement fees and interest rates for three or five-year fixed deals are about the same as two-year products.
According to the Council of Mortgage Lenders, a record number of borrowers took out tracker deals in January 2008 - almost a third of all mortgages - with the number of fixed rate deals falling to 57%, the lowest percentage since June 2005.
[ 29-03-2008 ]
