Posted on 19 November 2012 by
A broker has just claimed that last month they saw the largest take up of two year fixed rates so far this year, mainly on the back of lenders raising their Standard Variable Rates (SVR) over the past few months! Not an earth shattering claim you may think, however the curious figure is why so many of their customers took a two year fixed rate?
Economists, analysts and experts are broadly agreed, that the Bank Of England’s bank rate isn’t going to change much in the next two years, which makes it increasingly likely we will see further hikes in lenders SVR’s. Most of the economic forecasts for next year and the year after are hardly encouraging either, with job security still likely to be in short supply. Throw in the seemingly unending sovereign debt problems in the eurozone (the UK’s biggest trading partner), plus all the new rules that aren’t going to make getting a mortgage easier, coming into force in April 2014, and you really have to ask, why would anyone look at such a short term period ?
In October over 30% of mortgages taken out by John Charcol clients were 5 Year Fixed Rates, reflecting our view that, although the rates may not be as “sensationally low” as the 2 Year ones, overall they are likely to offer the better value, both in payment security and total cost.
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