Comparison site MoneySuperMarket.com has advised homeowners to consider fixing their mortgage now while providers are slashing rates.
MoneySuperMarket analysed average fixed term mortgage rates, finding that they have slipped down to some of their lowest ever levels again, despite many rumours about the possibility of a base rate increase next year.
Currently, the average rate for a five-year fixed deal rests at 3.45%. In 2014 it was 4.06% and in 2012 it was 4.67%. The same pattern is followed by shorter term mortgage deals, with the average three-year fixed rate currently standing at 3.21%, in comparison to a rate of 4.80% in 2012. Likewise, the average two-year fixed rate mortgage is now 2.90% compared to 4.48% in 2012.
Consumers will also have more deals to choose from, with 41 ten-year fixed rate products currently on the market. Only last month the total stood at 35.
“Mortgage lenders are doing a U-turn, decreasing their rates again after hiking them over the last couple of months,” Dan Plant, consumer expert at MoneySuperMarket, said. “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.”
He added: “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.”
Nonetheless, Plant warned that consumers should never rush into decisions to do with mortgages. “For most of us it’s our biggest single spend every month,” he said. “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,” he concluded. “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. ”