It’s been a busy start to the year for the mortgage market thanks to rate rises and an influx of borrowers looking to grab themselves a fixed rate deal. News of a surprise leap in inflation last month put further pressure on the Bank of England to raise interest rates and also led mortgage lenders to put up the cost of their fixed rates. So far this month a host of lenders including Halifax, C&G, HSBC, Northern Rock and Woolwich have raised the rates they offer on fixed rate mortgages – some by as much as 0.7%. As a result, we’ve seen a sharp increase in the number of customers taking out a fixed rate – keen to both secure a competitive interest rate and to protect their mortgage payments from future rate rises. If you’re one of the thousands of homeowners who’ve enjoyed low interest rates and low monthly mortgage payments over the last two years, then now is a good time to act and review your current mortgage deal. If you’re concerned about rising interest rates and the affect they could have on your finances, then fixing your mortgage rate now could be a good move – not only will it give you peace of mind that you’re monthly payments won’t rise for a set period of time, but you can also take advantage of the great deals on offer at the moment. If you’re on a low variable rate and are comfortable with your monthly mortgage payments (even if they were to rise a bit), then you may prefer to stick with your current deal for now and continue to benefit from the low repayments (see our post on overpaying). If you’re in two minds though, remember that fixed rates will have risen even further if you wait until the Bank of England puts up interest rates before deciding which way to go. New figures this week showing that the UK economy shrank by 0.5% in the last quarter of 2010 may cast further uncertainty over interest rates, but when it comes to mortgages, if you’re after a fixed rate then you’re still likely to get a bargain if you secure one now. Try our rate change calculator to see how a change in interest rate could affect your finances and take a look at the latest best buy mortgage deals here.
Borrowers rush to secure a fixed rate as rates rise