Moneyfacts: Many forced to costly fixed-rate mortgages

Date:Friday 19th December 2008
Author: Rachel Fletcher

Many people are being forced on to expensive fixed-rate mortgage deals as lenders do not bring back cheaper tracker products, it has been said.

According to, two-year fixed-rate mortgages have fallen by just 0.71 percentage points, even though the two-year swap rate has fallen by 2.61 percentage points since the start of October.

The personal finance information provider said that the difference between the average two-year fixed and tracker mortgage is now 1.16 per cent, while a year ago it was 0.14 per cent.

Moneyfacts analyst Michelle Slade said: "It is evident that lenders are continuing to increase their margins, despite a fall in the cost of funding."

This week, Virginia Wallis advised a Guardian reader whose fixed-rate mortgage expires at the end of January to go for a variable rate deal, citing Moneyfacts data.

While this brings uncertainty to the cost of monthly payments, Ms Wallis said that it may well mean paying less than the current amount.