Mortgage news
Mortgage Rates - is it time to fix?
Dale Mortgage Brokers comments on the availability of fixed rate mortgages and whether now is the time to move from the lender's Standard Variable Rate (SVR) to a fixed rate.
"While fixed rates are as low as we have seen for some time, this could change in the very near future. Several lenders have recently withdrawn some of their purchase products and not replaced them, and others may well follow suit.
WHY FIXED RATES ARE LIKELY TO RISE
Fixed rate mortgage deals have little to do with the Bank of England base rate. To fund lending to consumers in the form of a mortgage, lenders will utilise combinations of retail deposits from savers and will borrow commercially from each other, and the rate at which they borrow from each other will directly impact upon the rate they are able to offer to the consumer. Recently the rates that these banks pay have increased, and therefore many lenders have been forced to re-price their mortgage deals to take this into account.
WHY YOU NEED TO DO IT NOW
At the moment, there is high demand from buyers wanting to take advantage of low house prices and lenders are inundated at a time when they do not have a vast amount of funds to lend. Lenders normally put aside an amount of funding at a set rate and when this has gone, they launch a new rate which is likely to be higher. If you fix your mortgage now, you may still be able to arrange a rate on a deal launched a few weeks ago, and get in before the product is gone or re-priced.
WILL RATES KEEP RISING?
No one can predict what will happen in the future but the message for borrowers on a SVR and wanting to take advantage of a good fixed rate is clear - arrange it now or risk missing out on the current relatively low rates.
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