Take-up of fixed rates soars!
Published ¤ 22/04/2009
At PKS we have seen a massive increase in the number of fixed rate mortgage applications in the last couple of months. Towards the end of last year we saw around 15% of applications for fixed rates, whereas today we are seeing almost 80%!
Ray Boulger of John Charcol, said they have also seen a huge increase; "The increase comes as a result of a combination of several factors, the most obvious being that with Bank Rate [Bank of England base rate] now at 0.5% there is only one way for it to go - the only questions being the timing and the scale and speed of the increase.
"Another important factor is that the historically huge margins above Bank Rate now being charged by lenders for new tracker mortgages means that the risk of being locked into an expensive tracker mortgage when rates go up outweighs the fact that initially a fixed rate is a little more expensive.
"A third factor is that until recently there were no trackers available above 75% LTV [loan to value - the ratio of the mortgage amount to the property value expressed as a percentage] and so borrowers wanting more than 75% couldn't have a tracker even if they wanted one."
We now have fixed rates from 0%, although these have lengthy tie-ins. We have 5 year fixed rates starting at 4.15%, and tracker rates from only 2.49%, without extended penalties (rates correct at time of publishing).
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