Check now for best mortgage deals
Homeowners are being urged to check they are getting the best deal on the mortgage.
New analysis by the price comparison site, MoneySupermarket.com, has shown that average mortgage rates have begun to rise.
And a number of lenders announced increases to standard variable rates from the beginning of May.
The analysis by price comparison website MoneySupermarket.com found the average rate for two-year fixes hit a low in October 2011 falling to 3.82 per cent - the lowest figure since April 2009 - but has now risen to 4.15 per cent.
This means a difference of £27.31 per month or £327.72 over the year for repayments based on a £150,000 mortgage. Similarly, five-year fixed rates hit a low in January this year with an average rate of 4.57 per cent but this has crept up to 4.72 per cent adding an extra £12.81 per month or £153.72 over the course of a year.
For two-year trackers, the average rate was at its lowest in August 2011 at 3.37 per cent but now stands at 3.63 per cent, hitting consumers with an extra £20.91 per month payment or £250.92 over the year. There have also been a number of standard variable rate rises.
about a million customers will be affected by increases by providers including Halifax, Co-operative Bank, Bank of Ireland and RBS/NatWest.
Overall, the average increase to standard variable rates is 0.62 per cent adds an extra £52.58 a month to a £150,000 mortgage or £630.96 over the year. Neil Southern, mortgage expert at Renshaw Wealth, Bath St, Ilkeston said: “Mortgage rates are nudging upwards so anyone looking for a mortgage or whose mortgage deal will end in the next few months should act sooner rather than later to secure one of the current rates in case they rise further. “Borrowers paying their lender’s standard variable rate should also reassess their mortgage arrangements.
“One of the consequences of the low base rate has been the fact that standard variable rates have been similar to the rates on new mortgage deals and in some cases the standard variable rate has been even lower.
“As a result, an increasing number of people have opted to stick with their existing lender and move on to the standard variable rate when their fixed or introductory tracker or discounted period ended, as opposed to remortgaging elsewhere. “However, as around one million borrowers are about to find out next month, many standard variable rates can rise even if base rate doesn’t. “Economists are expecting base rate to remain at 0.5 per cent for the foreseeable future. A lot of people may therefore be happy to opt for a variable rate mortgage.
“Tracker mortgages are directly linked to base rate so any changes directly mirror moves in the Bank of England base rate.
This is different to discounts which are linked to the lender’s standard variable rate, so given the forthcoming standard variable rate increases; a tracker is a safer option. “If the prospect of higher mortgage repayments worries you, a fixed rate deal will give you peace of mind and protect you from interest rate increases for a set period of time.”
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Sunday 19 May 2013
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Temperature: 10 C to 17 C
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