UK Money News
17th June 2008
Cost of fixed rate deals hits ten-year high
Borrowers seeking the stability of fixed rate mortgages are being hit by increasingly higher repayment rates, new research has shown.
During May the average rate charged by providers has increased to 6.75 per cent, according to a study conducted by Moneyfacts.co.uk.
This means that two year fixes are now more costly than at any time over the last decade.
The cost of longer term deals has also risen, with the average rate on a five-year fix now standing at 6.72 per cent.
Darren Cook, mortgage expert at Moneyfacts.co.uk, said: "Many borrowers prefer fixed rate deals, particularly in today's economic climate as they struggle to keep outgoings under control.
"However, many are likely to find this increased cost too much to bear. With the average two year variable rate standing at 6.66 per cent, many are finding they have little choice."
Analysts have attributed the increase in the cost of mortgages to concerns over rising inflation, which is pushing up the cost of borrowing via the money markets.
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