4th November 2015
Home owners are being urged to lock into cheap fixed rate mortgages as rates are at their lowest level in three years.
Average fixed rates for two, three and five-year mortgages are at their lowest .level since 2012, according to MoneySuperMarket, despite speculation of a base rate rise next year.
The average rate for a five-year fixed deal currently stands at 3.45%, while last year it was 4.06%, and in 2012 it was 4.67%.
Shorter term mortgage deals also follow the same pattern, with the average three-year fixed rate coming in at 3.21% today, compared to a rate of 4.80% in 2012. Similarly, the average two-year fixed mortgage rate is now 2.90%, whereas it was 4.48% in 2012.
Those looking to secure their mortgage rate for a more substantial amount of time will find that there are now more deals to choose from. There are currently 41 ten-year fixed rate products on the market – while just last month the total number stood at 35.
Dan Plant, consumer expert at MoneySuperMarket, says: “Mortgage lenders are doing a U-turn, decreasing their rates again after hiking them over the last couple of months. Even though the Bank of England base rate hasn’t risen yet, it’s still a case of when rather than if, so any homeowners looking for a cheaper deal should take advantage of the current low rates. Many lenders allow mortgage holders to reserve rates available now for up to six months for a small fee, so even those who still have some time left on their current deal can benefit.
“However, you should never rush into decisions to do with mortgages – after all, for most of us it’s our biggest single spend every month. Before taking out a mortgage, it’s vital to work out the total cost over the term of the deal, taking both rates and fees into account. Expensive fees can wipe out the potential benefit of a lower rate so do the sums first to ensure you really are getting a great deal. The good news is that we’ve seen fees decrease over the last four years**, especially for five year fixed deals, meaning it’s a cheap time overall to be looking around.”