If you are a fixed rate mortgage owner, you might be in for a rude shock. Money Expert revealed that an extra £200 would be slapped on to fixed rate mortgages following the rise in the average cost of a fixed rate deal.
This would see at least 450,000 people having fixed-rate mortgages paying an additional £200 a month, i.e. £2400 per year. MoneyExpert noted that these people had opted for a fixed deal in the year 2003 when the average interest rates for these loans were 4.23 per cent.
However, the average costs of these mortgages had now increased to 5.5 per cent and what’s more worse, a borrower whose mortgage fixed term was ending and who had moved on to the lender’s standard variable rate would have to pay an even higher price, an average of 6.64 per cent.
People with £100,000 interest-only mortgages would now have their repayments per month increased from £352.50 to £553.33, meaning a rise of £2,409.96 in repayments per year.
Chief executive of MoneyExpert, Sean Gardner added that fixed rate owners had opted for such deals a couple of years back at lucrative interest rates and had also done considerably well for themselves, but the rates had changed over time and now they would have to pay higher costs. He added, “a £200-a-month increase on the average £100,000 mortgage would raise their monthly payments by more than 50 per cent. It is essential they shop around for the best deal.”
Posted
on : Fri, 08 Apr 2005 00:00 GMT | Mortgages News
By : Anne Philips
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