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5 of the best fixed rates on the market today. If you are interested in any of the products below simply click on the DETAILS button for more information. |
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Initial
Rate &
Period |
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Rate
Thereafter |
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Overall
Cost for
Comparison |
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Early
Repayment
Charges |
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Fees
Payable |
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LTV |
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Other
Features/
Conditions |
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5.95%
fixed untill 31/08/2010 |
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7.00% |
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7.4 APR% |
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See Details |
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Arrangement
Fee £999 |
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75% |
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5.89%,
3 years untill 31/08/2011 |
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7.00% |
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7.3 APR% |
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See Details |
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Arrangement
Fee £999
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75% |
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5.99% untill
31/07/2013 |
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5.95% |
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6.2 APR% |
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See Details
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Arrangement
Fee £999 |
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60% |
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5.59%,
10 years until 31/07/2008 |
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5.95% |
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6.9 APR% |
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6% of the balance
repaid until 31/07/2018 |
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Arrangement
Fee £995 |
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60% |
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6.18%,
25 years Fixed |
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6.49% |
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6.5 APR% |
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3.0% within 25
Years |
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Arrangement
Fee £599 |
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75% |
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Catch the good rates. If you would like to know what rates are available to you right now, simply click on the QUOTE button and answer a few easy questions. Our experienced consultants will search the market and contact you with the options available to suit your circumstances. |
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Speak to our friendly senior adviser, Emma Fellows. Emma Fellows CeMap is a longstanding employee of Home & Landlord Mortgages with over six years experience in the Financial Services sector. Emma has an extensive portfolio of properties herself and recently appeared on the BBC documentary "What makes Britain rich?" Emma is a fully qualified Mortgage Advisor and is an integral part of the Company and offers advice on a full range of mortgages for your home.
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Fixed Rate Mortgages
Fixed rate mortgages are changing fast – and mostly for the better. Today you have more choice of rate, term and lender than ever before. Experts say you are also less likely to be trapped in an inflexible deal with no way to reduce your payments if interest rates go against you. It’s all good news for anyone stretching to borrow a lot of money in what looks like an increasingly uncertain economic climate. But there are some clouds on the horizon, not least in the form of ever higher application fees.
So read on if you think a fixed rate mortgage might be for you. Here’s all the background you need – plus our independent analysis of the latest trends in the fixed rate mortgage market.
Fixed rate mortgages – in a nutshell.
The key selling point of a fixed rate mortgage has always been payment security. You know that the rate you will pay for your mortgage will stay the same for the pre-agreed term, normally two, five or ten years. So whatever else happens to interest rates and the economy your monthly mortgage payments won’t change. This is what makes fixes such good choices for first-time buyers or anyone else stretching to climb up the housing ladder. ‘If your mortgage payments are at the upper limit of what you can afford each month then you should always at least consider taking out a fix,’ says Nick Gardener of broker Chase de Vere Mortgage Management in London. ‘Fixes are also good for people who aren’t sure exactly how much home ownership is going to cost them and want at least one of their new monthly bills to be a known quantity.’
The problem with fixes
Taking out a fixed rate mortgage will always feel good if interest rates rise during the term. Everyone else you know may be squeezed by higher monthly payments. But yours won’t have changed by a penny. The problem is that fixes can feel bad if interest rates fall. When this happened in 2001, for example, many people on fixes felt marooned on above-average interest rates. ‘No-one ever knows exactly what is going to happen to interest rates in the future so you are taking something of a gamble with a fix,’ says Gardener. ‘But the simple rule about them stays the same. If you would have struggled to meet your repayments if rates had risen then the fix was still worth having, even if you feel bad for a while when rates fell.’ He also points out that today’s more flexible fixes mean you can now improve your situation even if interest rates go against you. See later on for our simple strategy.
Which rate – and how long?
Research by financial firm Moneyfacts shows that there are literally thousands of fixed rate deals to choose from. Almost every bank, building society and other lender will offer at least one and some have more than a half a dozen fixes on offer. So how to choose between them? Experts say the first thing is to ask how long you want your payment security to last. If you are moving into a new home and just want time to find your feet then two year deals are often good choices. If you are about to face several years worth of bills – possibly for school fees – then longer term fixes can give you more confidence about affording them. The rates will vary according to the terms. The longer the term the higher the rate tends to be, though there are times when the opposite is true. Some lenders also offer special lower priced fixes for first-time buyers. When you are picking a fix it is always important to compare deals with as many lenders as possible. Check out the best-buy tables in the money sections of newspapers and use independent price comparison sites such as moneyfacts.co.uk and moneysupermarket.co.uk to make sure you get a good deal. Low or no-fee brokers can also be worth using.
Today’s good news on fixes – more flexibility.
In the 1990s one of the big problems with fixed rate mortgages was that you were pretty much stuck if you picked a bad deal and interest rates went against you. Lenders wouldn’t let their fixed rate customers opt out of the deals and switch on to cheaper alternatives without paying hefty penalties worth up to six months interest. Today those six months interest penalties tend to still apply, so you do need to be certain that a fix is right for you before signing up. But lenders have introduced some extra wriggle-room for borrowers. Most now let you repay up to 10 per cent of your loan each year without any penalties. So if you have any spare cash you are free to cut your monthly payments by cutting the size of your loan. It’s a strategy most mortgage experts advise considering whatever happens to interest rates. Clearing debt early is almost always the best financial strategy you can have.
Today’s bad news on fixes – higher fees.
Plenty of competition between lenders mean today’s fixed rates can look surprisingly keen. Many are often set at a similar level to the best discount mortgage rates – a big change on the past when you always used to pay a premium rate for payment security. But the lenders are not as generous as they seem. ‘In one month alone recently 11 major lenders increased their arrangement fees by up to £200, switched to percentage based fees or introduced fees on products which had previously been fee-free,’ says Scott Hanton, mortgage analyst at Moneyfacts. Five years ago you could get a good fixed rate deal for an application or arrangement fee of less than £300. Today you are likely to be paying £699 or more for the best deals. Percentage based fees can be even more expensive – some lenders will charge 1.5 per cent of the mortgage value for their best fixes. So you need to think very carefully whether the rate you are getting is low enough to justify the high set-up costs.
Fixes that are too good to be true.
One set of fixed rate deals always catch the eye – the super-low ones that come in at around half the price of almost every other deal in the market. The thought of paying, say, 2.12 per cent rather than 4.98 per cent is incredibly attractive if money is tight. But there are expensive stings in the tale. The bargain basement fixes carry what the industry calls ‘extended tie-ins.’ In plain English this means that you are locked to your lender long after the low rate fix has ended. During this extended tie-in period you will be paying your lender’s variable interest rate – likely to be at least triple the low fixed rate. Try to opt out and you face thousands of pounds in penalties. ‘We always advise people to take out a fix with no extended tie-ins and to specifically ask about this before they sign up,’ says David Hollingworth of London & Country Mortgages. ‘This way you know that as soon as your fixed period ends you are free to shop around for a better deal elsewhere and will never be paying over the odds for your loan.’
Neil Simpson is a former Personal Finance Journalist of the Year and writes regularly on property, mortgage and insurance issues for the Mail on Sunday and many other publications.
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