Expert: Fixed Rate Mortgages Remain A Good Option
An expert has said that fixed rate mortgages remain a "sensible" choice following the recession.
People seeking a home credit deal in the aftermath of the global economic downturn might be well advised to look into the possibility of taking out a fixed rate mortgage.
That is according to Paula John, editor of Your Mortgage, who has stated that while fixed packages have not always offered rates that are as attractive as other alternatives such as tracker mortgage products, they remain a "sensible option" and are "always worth considering".
"Your mortgage is likely to be your largest ever financial commitment and the advantage of a fixed rate - whatever sort of borrower you are - is that you know exactly what your mortgage payments are going to be every month," she said.
Ms John added that a fixed rate product then enables consumers to make more effective plans for their overall personal finance situation, as this, she said, is more important than ever before following the recession due to the threat posed by its effects to the country's jobs market.
Her remarks came after the publication of data last week (August 24th) by the British Bankers' Association (BBA), which showed that the number of new house purchase approvals in the UK fell from 34,575 in June to 33,698 last month.
According to the BBA, gross mortgage lending throughout July totalled 8.4 billion, which is slightly lower than the average of 8.6 billion posted for the previous six months.
Meanwhile, the average value of house purchase approvals also dipped in July - to 148,500 - but, in a sign that the wider economy may be recovering following the recession, this remains 4.6 per cent higher than the figure seen one year ago.
Also published recently was research by Moneyfacts.co.uk which revealed that the average margin on a two-year fixed rate mortgage has risen from 1.28 per cent to 3.29 per cent over the course of the last two years, even though the base rate has dropped in that time.
by: Sam Gooch
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