Cost of fixed-rate mortgages may rise
LONDON (Reuters) - The cost of fixed-rate mortgages is set to rise, after "swap" rates hit their highest in more than two years.
The price at which lenders buy funds in the money markets to underpin loans has hit its highest since August 2005, as markets price in a 0.25% hike in the base rate next month and a further quarter percentage point increase next year.
As these rates determine fixed rate mortgages, homeowners who want to fix their interest rate should get their skates on. "With the likelihood of a further rise in the base rate in November, now could be a good time to get into a fixed rate," said Richard Brown, chief executive of Moneynet.co.uk. "There are still a number of two year deals available below 4.5 %, but we could see these being withdrawn and replaced with less attractive deals if the widely predicted increase is imposed next month."
However, with two Bank of England base rate rises already factored into "swaps", fixed deals could prove uncompetitive until the base rate rises beyond 5.25%.
The price at which lenders buy funds in the money markets to underpin loans has hit its highest since August 2005, as markets price in a 0.25% hike in the base rate next month and a further quarter percentage point increase next year.
As these rates determine fixed rate mortgages, homeowners who want to fix their interest rate should get their skates on. "With the likelihood of a further rise in the base rate in November, now could be a good time to get into a fixed rate," said Richard Brown, chief executive of Moneynet.co.uk. "There are still a number of two year deals available below 4.5 %, but we could see these being withdrawn and replaced with less attractive deals if the widely predicted increase is imposed next month."
However, with two Bank of England base rate rises already factored into "swaps", fixed deals could prove uncompetitive until the base rate rises beyond 5.25%.
posted by ew at
9:38 AM
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