The best fixed rates are going, going, gone says John Charcol

Many mortgage lenders have this week pulled their fixed rates and re-priced at a higher rate. Most other lenders have released rate withdrawal notices on their existing ranges, warning that funds are unlikely to last beyond the end of this week.

Katie Tucker, Product Specialist for John Charcol Comments: “The swap rates have been going up consistently for the past few weeks, reflecting an expected Bank Rate jump. This means that lenders were already increasing their fixed rates even before the Bank Rate rise and when their existing funds ran out their new deals are based on dearer funding costs and hence are less competitive. With last week’s Bank Rate rise being unexpected, many borrowers have rushed to take fixed rates as economic indicators suggest that there is at least one more Bank Rate rise to come now that inflation is at the upper limits of what is acceptable to the Chancellor.”

What Should borrowers do now?

Tucker continues; “Some lenders are still offering excellent fixed rates based on old money, although the best of these deals are unlikely to last beyond the end of this week. If you are on your lender’s SVR or if your existing mortgage deal is due to come to an end soon and you want a fixed rate, you should secure your new mortgage as soon as possible. Many lenders’ mortgage offers last for three or six months so even if you have a while until your current rate expires you can reserve funds on the replacement by applying now for a potentially better rate than you would be offered in a few months’ time.

“A few lenders have kept their rates at a similar level but with a larger arrangement fee. This could provide better value for you than if they had increased their rates. It is imperative that you consider the whole package before you commit to anything. A good Independent Mortgage Broker will be able to advise on what will offer the best value over the period that you are considering.”

Tucker concludes, “If you are looking for a two year fixed rate Nationwide still have funds available on the 4.84% for purchasers with a £799 arrangement fee which can be added. Their remortgage version is 4.94% with an arrangement fee of £799, and comes with free valuation and free legals. Their mortgage offers are valid for six months. Cheltenham and Gloucester and Lloyds TBS both offer a 5.09% five year fixed rate with an arrangement fee of £999, and free valuation and legals on remortgages. Their offers are valid for 4 months.”