Lenders rush to change fixed-rate mortgages
Published On 19 April 2007
Rising inflation and the expectation that interest rates will increase in the near future means that lenders are altering their mortgage deals, according to a consumer watchdog.Julia Harris, a mortgage analyst at Moneyfacts.co.uk, said that the banks are already gearing up for the Bank of England to put up interest rates when its Monetary Policy Committee meets early in May.
Following the inflation announcement, 11 mortgage lenders put up their fixed-rate deals by up to 0.3 per cent.
Similarly, several major lenders - including Alliance & Leicester and Skipton Building Society - have withdrawn some of their fixed-rate mortgages.
"With inflation hitting a 15-year high, the chance of at least one more base rate increase looks almost a certainty. While many borrowers have already opted for a fixed-rate deal, those that haven't will feel the pinch of any further rate rises," Ms Harris warned.
"For anyone looking to fix their mortgage in the short term, it may be better to do so sooner rather than later."
The Council of Mortgage Lenders recently reported that more and more first-time buyers were opting for fixed-rate deals as these allowed them to plan for future interest rate increases.
