Recent improvements in fixed and tracker rates once again grabbed some of the headlines in this weekend’s financial press, with the Telegraph and Mail on Sunday sounding the alarm for borrowers who reverted to Standard Variable Rate in the last 18 months and have seen their payments increase over the last few weeks. Whilst experts previously advised people to stay on low variable rates, it would seem that anyone who doesn’t consider changing now could lose out.
With a wider choice of mortgages comes an increase in the number of pitfalls, reported the Sunday Mirror. Best buy deals still carry high arrangement fees and the requirement for a large deposit, not to mention the dramatic increase in niche mortgages. In fact, the Times revealed that a quarter of all mortgage deals are reserved for existing customers, as more lenders choose to target a few customers rather than open up deals to the whole market and risk a flood of applications. On a more positive note the Mail on Sunday pointed out that lenders have cut rates even at higher loan to values and experts suggested that, while there is still a big differential between 60% and 85% mortgages, any improvement to rates is welcome news.
Elsewhere the Sunday Telegraph looked at ways to earn over 5% on savings, including taking an offset mortgage. This type of deal allows borrowers to offset their savings against their mortgage, only paying interest on the difference between the two – a useful option when savings rates are low.