Fixed Rate Mortgages
Fixed rate mortgages can be good for first time buyers and equally those on a tight budget who require the stability of a set monthly repayment. You can fix the rate for up to five years, however you may prefer to fix it for two or three years, as the current mortgage market is currently in a state of flux.
Once the fixed rate period has ended, the mortgage repayments will revert to the standard variable rate.
Tracker rate mortgages are rapidly becoming more competitive than fixed rate mortgage deals, following a rise in the rate at which lenders can borrow money. Trackers follow the up's and down's of the bank base rate, these should not be confused with variable rates, where the rate is set at the lender's discretion.
Competitive Fixed-Rate Mortgages
Competitive fixed-rate mortgages are reported to be on the decline and could soon disappear as a direct result of the previous and current mortgage market trends in the UK.
Over the past year and half, the difference in interest rates between fixed and tracker deals have become minimal. Back in Mid 2006 it was reported by some commentators that a0.25 per cent rise in the Bank of England base rate was due by the end of the year (2006), this surprisingly happened and has equally continued to rise. Money marketers will always incorporate such occurrences into their fixed-rate pricing.
So be aware the market is never as clear as it first appears, Bank aren't silly... That's why they are banks.
To keep an eye on the Latest Mortgage News, visit the Remortgage Market Media Center.
Some financial experts believe that even though rates are on the rise, they will eventually rates will go down again, before they rocket up.