Borrowers who rush to secure a fixed rate when the base rate starts to rise could end up paying over the odds, warned experts in the Observer this weekend. Despite some lenders dropping their rates recently, brokers are still advising homeowners to consider a tracker mortgage unless they are particularly nervous about increasing payments. Those who are taking advantage of low rates are urged to overpay now and reduce the shock of future rate rises. The Sunday Times continued with this by suggesting that anyone looking for a fixed rate deal should secure a good product now, as the prospect of a hung parliament threatens to push up the price of new loans. The Mail on Sunday took a look at an interesting alternative for those wanting to take advantage of current low rates but mindful of potential increases. The ‘get out of tracker free’ deals offered by lenders such as Nationwide allow borrowers to opt out of a tracker and move to a fixed rate without paying Early Repayment Charges. There are a few points to be wary of however, including the fact that new arrangement fees will be charged, and of course fixed rates are unlikely to be as competitive in the future. Offset mortgage also made an appearance in the weekend press, with the Independent urging savers to consider this type of deal at a time when average returns on instant access accounts are just 0.86%. Elsewhere the Independent on Sunday revealed that a shocking 24 million people in Britain have no life cover in place, and those that have considered cover would still underestimate their family’s income needs by £14,500 per year. The article highlighted the areas that people should be looking at when working out their sums, and also discussed the types of cover available.
What the papers say- 6th and 7th March 2010