Fixed rate popularity continues to rise
The popularity of fixed rate mortgages continues to rise amongst consumers in the UK, as past and forthcoming interest rate hikes take their toll, resulting in a flurry of interest in fixed rate deals amongst homeowners and new property purchasers. A number of homeowners have already been caught out by the three interest rate rises that have been applied by the Bank of England since last August, taking the interest rate from 4.5 percent to 5.25 percent.
Those with a variable rate mortgage and those looking to purchase a new property are now trying to avoid the financial pinch of yet another interest rate rise, which has been predicted for May. Many experts are predicting a further interest rate in the summer too. Consumers hope that by switching from a variable rate to a fixed rate, or by opting for a fixed rate to start with, they can enjoy stable repayments and won’t have to worry about the prospect of increasing repayments if the interest rates do rise again.
However, as a result of the impending interest rate rises, a number of lenders have already increased the rates on their fixed rate deals, which makes it more expensive for consumers to enjoy fixed repayments – and some lenders have taken some of their best fixed rate deals off the market altogether, leaving consumers with far less choice when it comes to finding a fixed rate mortgage deal.
One mortgage company reported a thirty percent rise in the number of consumers seeking fixed rate deals in the space of just one month. Experts are urging consumers not to rush into a decision with regards to fixed rates, and to ensure that they check other factors such as the amount of the arrangement fee charged by the lender before committing to any particular deal.
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