What the papers say- 16th and 17th April 2011

The Sunday Times reported this weekend that borrowers are still opting for cheap variable rate rather than fixed rates mortgages. Experts suggested that many homeowners will be able to cope with several interest rate rises before they would be worse off than taking a fix. Others however will often prefer peace of mind and, depending on how rates move; the premium for taking a fixed rate could be a small one. Check out our calculator to see the effect of interest rate changes on mortgage payments. The choice over what rate to take may not be so easy for wealthier borrowers, revealed the Financial Times. Since the financial crisis regulators have forced banking groups to change their pay structure, reducing the level of cash bonuses or deferring them for several years. Lenders have also tightened up on criteria, with many banks only recognising 25-50% of bonuses rather than the previous 50-100%, leaving some borrowers short on income and stuck on a Standard Variable Rate. Landlords on the other hand are benefiting from a booming Buy-to-Let market, due to a significant improvement in mortgage availability as well as increasing rental demand from First Time Buyers unable to get onto the property ladder. Borrowers still face the dilemma of whether to choose a fixed or variable rate mortgage, but experts say that an increase in competition will certainly help that decision. Elsewhere the Guardian looked at the importance of Income Protection. The Government is currently reviewing long-term sickness and is due to report later this year, with experts suggesting that they could recommend that both employers and employees are required to buy insurance.

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