Fixed Rates Getting More Popular Friday, 6th March 2009

Borrowers are becoming more keen to take up lower rate deals yet enjoy stable repayments for a fixed period of time to help them to budget more easily in the current difficult financial climate. As such new lower fixed rate mortgages may be gaining popularity again.

In the history of the Bank of England, standing at just half percent following a series of base rate cuts over the past five months, the base interest rate is now at its lowest.

For those that do not want to have to worry about fluctuating mortgage repayments each month these mortgages are providing an effective alternative to the lenders’ standard variable rate mortgage deal. So, some banks have now launched competitive fixed rate mortgage deals in response to the recent rate cuts.

There are a number of lenders launching competitive deals and the two year fixed rate mortgage is proving a popular choice.

Now that the base rate is so low and a number of fixed rate deals for under 4 percent are coming onto the market, some homeowners are looking to fix their repayments at these competitive rates to make it easier to manage their finances.

Up to now, many homeowners and property purchasers have been opting for the lenders’ standard variable rate mortgages since the base rate started to fall last October, with many hoping that they would benefit from the rapidly falling rate.

Despite the falling interest rates, and expectations that the base rate could fall to as low as zero over the course of this year, over 50 percent of homeowners were still opting for the security of a fixed rate mortgage to ensure that they repayments remain stable each month for a period of time.