Homeowners encouraged to consider fixed-rate mortgages

Date:Thursday 7th May 2009
Author: Max Freedman

Homeowners in the UK have been encouraged to consider securing fixed-rate mortgages in order to take advantage of the current low interest rates.

According to Alliance & Leicester Mortgages, there are deals available at the moment for as low as 2.99 per cent.

Despite this, the bank found that 81 per cent of borrowers who are currently on their lenders' standard variable-rate (SVR) mortgages have no immediate plans to seek out cheaper products.

Meanwhile, 14 per cent of existing SVR mortgage holders intend to wait until house prices and interest rates pick up before searching for better deals.

Nici Audhlam-Gardiner, director of Alliance & Leicester Mortgages, said: "It is perhaps unsurprising that some homeowners currently on SVR deals are reluctant to commit to a new mortgage, but past experience shows that fixed rates tend to increase in price before the base rate."

Earlier this month, Catherine Hearnden, director at MyMortgageDirect, advised consumers to seek advice before committing to a mortgage deal.