Mark Chilton, chief executive of Purely Mortgages commented on Bank of England’s decision to keep rates on hold: “Although the MPC has decided to maintain the base rate at the same level this month, the market is anticipating a future rise in the coming months. We are already seeing a marked decrease in attractive two year fixed rate mortgages with increases in rates from lenders in line with rising swap rates;one or two lenders however continue to provide competitive deals based on swap positions they locked in before the recent increases in 2 year rates.
“Therefore borrowers should be more concerned with their lender’s SVR, which are exposed to further increases in Base Rate. Purely Mortgages urges people on variable rates to think quickly about remortgaging to a good fix while they are still low. Given the increasing consensus in the market that rates will certainly rise again in the near future, our current product view is still firmly in favour of fixed rates, with the best deals showing savings of over 2% against mainstream standard variable rates.
“Purely Mortgages calculates that someone on a £100,000 interest-only mortgage, currently paying an SVR of 6.75 per cent, remortgaging to the best two year fix for the remainder of the term (currently around 4.69 per cent) will save over £4,000 in interest payments or approximately £167 per month over the next two years.”
