News
Jun 05
Mortgage Rates set to soar: Fix Now!
The next two years could spell bad news for borrowers who have failed to take action and fix their mortgage rates, as warnings abound over soaring rates which could force repayments skywards by £3,000 on a £200,000 mortgage, a recent report in the Sunday Times stated.
The warnings are hailed in the light of the launch of two new five-year fixed rate deals at 3.99% courtesy of Britannia and the Co-op; the first instance of five year fixed rates falling below 4% for a year.
Standard Variable Rate to Rise
According to Credit Suisse, lenders are set to raise mortgage profit margins and it is likely this will be done by raising existing customers’ standard variable rates and increasing margins on new lending.
On this note, Lloyds has announced an increase in its standard variable rate from 2.5% to 3.99% for new and existing customers when taking a new product or increasing their borrowing.
Other Lenders to Follow the Lloyds SVR Increase
Michelle Slade of the Moneyfacts website commented on the move by Lloyds: “The move by Lloyds follows similar moves by Nationwide Building Society and other smaller societies,” she said. “Now the UK’s biggest lender has moved to increase rates, other providers may follow.”
“Borrowers must not sit back and drift onto the Standard Variable Rate”
Geoff Charles, Managing Director of Bower Mortgage Company, said: “Borrowers absolutely cannot sit back and let themselves drift onto the Standard Variable Rate if they wish to know their exact mortgage costs. There is no guarantee of fixed monthly expenditure in this scenario and the danger is they may end up paying a much higher rate if no action is taken now while fixed rates are at their lowest for some time. Taking independent advice without delay is crucial.”
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
Bower Mortgage Company: FSA regulated UK-wide mortgage advice from friendly, qualified, experienced mortgage planning specialists. Quality, face to face advice and a strong focus on building long term customer relationships. For money saving mortgage and mortgage protection advice, contact Bower on 0800 411 8668 or e-mail info@bowermortgagecompany.co.uk.
