Recent statistics have shown that the average rate available on a 5 year fixed rate have been falling in recent years. The figures from data provider Moneyfacts show that the average rate available has dropped substantially in the last year and by more than 1 per cent since 2010.
That’s great news for those borrowers looking ahead to the day when Base rate will have to rise from its current record low of just 0.50%. When that day will come is still very hard to judge and the last couple of weeks have brought data that won’t help clarify the situation.
With inflation not falling as quickly as had been expected some have suggested that it may have to lead to a tougher stance on monetary policy being taken. However, that has been quickly followed by the gloomy news that the UK experienced the second successive quarter of negative growth, sending us into double dip recession.
Although a rate rise may be some way away yet the continued uncertainty and fluctuating costs that many households are facing will mean that many will like the idea of knowing where they stand with the largest monthly outgoing, the mortgage.
Whilst the statistics show that there are some extremely attractive fixes available, it doesn’t quite tell the whole story. The very lowest rates came earlier this year and the trend in the market is now for fixed and tracker rates to be increasing.
Lenders are still dealing with higher funding costs and have limited appetite for lending, which is forcing mortgage rates to nudge up. Many lenders will have tweaked their deals several times in the last few weeks and there is little to suggest that trend will be reversed in the short term.
With good 5 year fixed rates still available below 4% there is little to be gained by delaying a move to lock into a deal now. Waiting may only see rates push up and ultimately end up costing you more.