UK Money News
9th July 2008
Fixed rate deal costs continuing to rise
Borrowers are continuing to be squeezed by increasingly costly fixed rate mortgages, new figures have shown.
Data from the Bank of England showed that the typical rate on a new two-year, 75 per cent loan-to-value fixed mortgage rose 37 basis points in June to 6.63 per cent.
This is the highest level recorded since February 2000.
The cost of three-year and five-year fixed-rate deals also increased, due principally to a rise in the borrowing rates in the money markets.
George Buckley, chief economist at Deutsche Bank, said the higher cost of the deals meant that homeowners coming to the end of the fixed term of their loans are facing tough times ahead.
He told the Reuters news agency: "The repayment shock for those attempting to refinance two-year fixed mortgages is now huge.
"They are paying on average 163 basis points more than when they took the mortgage out."
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