Experts in this weekend’s financial press warned that turning to a fixed rate too early could mean that borrowers lose out on current low variable rates. The Sunday Telegraph, Sunday Mirror and Express all reported that fixed rates have increased over recent weeks due in part to intense demand as borrowers look to take a new deal before rates rise, but homeowners with room in their budget were urged to consider cheaper tracker rate mortgages. The issue of affordability is of course an important factor and anyone concerned about increases in their payments would do well to look at longer term fixed rates. Brokers in the Sunday Times also suggested getting the best of both worlds by taking advantage of low tracker rates but overpaying to the level of a 5 year fixed rate, therefore making serious inroads into the mortgage balance. See the effect of overpaying using our calculator. The Financial Times revealed that the FSA is likely to back-track on its decision to ban fast-track mortgages, following evidence provided by lenders to show that these loans are better performing and have a low level of default than income-verified mortgages. Banks and building societies have tightened up on criteria and credit scoring over recent months and are now in a better position to identify low-risk cases. Elsewhere the Times looked at offers from mortgage lenders including waiving of Early Repayment Charges, retention deals, incentives to switch from Standard Variable Rate and overpayment initiatives, while the Observer reported on the intricacies of Critical Illness policies.
What the papers say- 12th and 13th March 2011