There have been an increasing number of borrowers taking out fixed-rate mortgages according to the Council of Mortgage Lenders (CML). For the month of June the latest statistics show that people taking out fixed-rate loans rose from 66 percent to 69 percent.

As falling swap rates allow lenders to lower the cost of borrowing its suggested by the CML that this will continue.

In the report it also shows that the salary multiples being paid for mortgages since May have decreased for home movers from 2.97 to 2.94 and for first time buyers from 3.35 to 3.33.

It’s also considered that a lot of people want to safe guard themselves from a possible Bank of England base rate rise, and like to have the security of knowing what their monthly payment will be for the term of their mortgage deal.

After today’s news of the consumer price index measurement of inflation rising to 4.4 percent, the monetary policy committee may have to raise the Bank of England Base Rate.

Pressure on the monetary policy committee to raise the rate may increase following today’s news that the consumer price index measurement of inflation has climbed to 4.4 per cent.

Source: hotproperty

If you was to take out their two-year fixed-rate deal your new rate will be 6.34%, this comes with a setup fee of £999. The three-year fixed-rate deal at 75% LTV has a starting rate of 6.29%.

Director of mortgages at Abbey, Phil Cliff has said that they are committed to offering competitive deals; because of their strength in the mortgage market it has allowed them to introduce these rate cuts.

It seems to me that both Abbey and Nationwide Building Society are at a constant struggle with each other, to see who can offer the best rates to customers. This kind of thing is great, as you and I get to benefit, let us hope that more mortgage lenders jump on the bandwagon.

Nationwide are to reduce their interest rates on a range of their fixed-rate and tracker mortgages, rates on their fixed rate terms will fall 0.07% while a two-year fixed will now be available from 6.58% with a set up fee of £599, a 6.98% rate will have no fee.

Nationwide who recently launched their new two-year tracker will now start at 5.98%, this has a set up fee of £599, while the 5.78% has a fee of £1,499.

Looking closely at these new rates, it looks as though these tracker mortgages are now down by 0.27% however; these new rates only apply to those with larger deposits, so if you only have a 5% deposit, forget it.

Santander owned Abbey has now reduced the rate on their 75% loan-to-value fixed-rate and tracker loans by 0.2%. It is thought that other companies like Birmingham Midshires, will also announce rate cuts in the coming days.

Source

Freddie Mac had reported that 30-year fixed-rate mortgages were around 6.35 percent this week; this was down from 6.45 on the week before.

This recent decline has now pushed the rate to its lowest in three weeks, however it still remained above 6 percent, which is where it has stayed since May 29.

A meeting had been held on June 24-25 over interest rates, the central bank had brought an end to the aggressive rate-cutting campaign, they said that the risk of inflation has now increased.

In a recent statement from the Federal Reserve, there was nothing to hint that rates would start rising any time soon.

There are many private economists who believe that the Fed will keep the key short-term rates it controls much the same for the rest of the year at least however; Nothaft has said that the federal funds futures market, where investors make bets on when the Federal Reserve will make any such changes to rates show that there could be an increase later this year.

Source

Francis Ghiloni, marketing and business development director at Informed Mortgage Choice has said “the trend towards higher rates on fixes will continue as long as banks are facing difficult operating conditions in the money markets.” He also added Mortgage rates are continuing to rise despite concerted action by the Bank of England and it is unlikely there will be many fixed-rate deals left for below six per cent.”

The average deal for a standard two-year fixed rate mortgage is now 6.75 per cent, this is now the highest rate in ten years. We will warn you that this is set to get a lot worse, Mervyn King, Govorner of The Bank of England has said to expect interest rate increases each month until inflation goes back down. At them moment inflation is now at 3.3 percent, King needs to get this back down to 2 percent which is the preferred level. The people who will have to help getting this down are you with mortgages, we all have to tighten our belts, until we can work through this current crisis.

Source

Moneyfacts.co.uk, have launched some new figures and the results are very interesting. On average two-year fixed-rate mortgages are now set at 6.75 per cent, the average cost of a five-year fixed term mortgage has increased to 6.72 per cent. Many customers will now be moaning that they now have to pay much more on their monthly payments, but Darren Cook, Moneyfacts mortgage expert has said that “consumers are paying the price for the vast sums lenders now have to pay in order to secure funds.”

Cook has also warned that the situation is likely to get worse before it shows signs of improvement. He also said that while a fixed-rate mortgage seems more appealing than that of a variable rate given the UK’s current financial situation, these types of loans might just prove too expensive for some customers.

That said most customers will want to fix their mortgages, as there are no signs of the mortgage market recovering any time soon. My Brother took out a five-year fixed rate a little over a year ago; he did not think that he made the right choice back then. Now if you take a look at how the credit crisis is taking hold of the UK, he is now thankful that he did.

Source

According to Caldwll he said that it seems that many people would rather the long-term mortgage solution, the reason for this is because it will help to provide more security for those who are on a low income, as well as first time buyers. Fixed-rate mortgages are the preferred option with the government. Chancellor, Alistair Darling, has stated that he would rather people have access to such mortgages.

You do have to wonder though if mortgage lenders will want to offer a longer term mortgage; these lenders seem to be a little more jumpy when it comes to offering new mortgages. Although lenders are facing tough times with new mortgages, they have to be very careful as they need to make sure borrowers can afford such payments.

So if you had the choice, would you rather a longer term mortgage?