After a number of mortgage lenders have increased their rates, the era of very low interest rates could be reaching its closing stages.
Though the Bank of England has cut the base interest rate to 0.25%, mortgages are more affected by the SWAP rate, which is the rate by which they raise money. The SWAP rate has risen recently and this has put pressure on the lenders to raise their rates.
Over the last year, there have been record low interest rates on mortgages. Though many mortgage rates have risen, mortgages can still be found at low rates.
Charlotte Nelson of MoneyFacts said:
“Fixed mortgage rates are still very low in comparison with a year ago, so borrowers who are sitting on their SVR or coming to the end of their mortgage deal need to decide whether they are willing to miss the opportunity to fix to a low rate.”
Figures published by MoneyFacts.co.uk show that the average two-year mortgage arranged on a fixed-rate basis has an average interest rate of 2,34%. This compares to 2.56% a year ago.
A mortgage broker can access the best mortgage deals, and now may be a good time to switch to a lower fixed-rate mortgage that can save a large amount of money. A broker can also arrange mortgage protection insurance to protect payments in case of sickness or an accident.