Huge rise in number of cheap five-year fixed-rate mortgages
Over recent weeks tracker mortgages have once more become cheaper than their fixed-rate equivalents, according to new research.
Historically, tracker rate mortgages have always tended to be cheaper while the main benefit offered by fixed-rate mortgages is peace of mind for the borrower, but over the past 18 months base rate cuts have led to fixed-rates becoming as cheap as tracker mortgages .
However, new research by Moneyfacts shows that the balance is being redressed as fixed-rate mortgage lenders are increasing their rates once more due to concern over a potential interest rate hike, making trackers the cheaper alternative once again.
Moneyfacts analyst Lisa Taylor commented: Consumers should perhaps look at this as a perfect opportunity to review their current mortgage arrangements, choosing a rate type and term that best suits their future circumstances and plans.
Last summer, the Bank of England (BoE) cut the interest rate to just 4.5 per cent, meaning fixed-rate mortgage lenders cut their own rates in anticipation of a further base rate cut, with some offering deals as low at as low as 4.24 per cent.
However, with it emerging that one member of the BoE's Monetary Policy Committee recently voted for the rate to be hiked back up to 4.75 per cent, fixed rates are once again rising, although Ms Taylor says many borrowers still prefer them for the security they offer.
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