Longer-term mortgage deals 'could work out cheaper'

Date:Thursday 10th December 2009
Author: Susanna Kavka

Talking out a longer-term mortgage deal could work out to be more cost-effective in the long run, according to one mortgage expert.

Editor of What Mortgage? magazine Ben Wilkie believes that for some people, taking into account all the costs of a mortgage and then dividing it over the number of months that the consumer has to pay it is the best way of working out what will be the cheapest option for them.

For people attracted to the new lower rates on a two-year fixed rate product, they may well save money in the short term, but once the deal ends, it could be that a longer-term product is the better alternative.

Mr Wilkie's advice follows on from the announcement made by Moneyfacts.co.uk that the average rate for a two-year fixed rate product now stands at 4.86 per cent. As the figure stood at five per cent last week, it marks the largest weekly fall in rates since the start of this year.