Charcol has urged those borrowers coming off a very low fixed rate to consider taking a six-month discount while uncertainty remains over which way rates will move.
Borrowers who will have been used to paying rates around 3.3% over the last two years will only be able to get a 2-year fixed rate for 4.85% at present, some 1.5% more expensive. Charcol’s product has a pay rate of 4.3% and no early redemption charges.
Key Features
- 1.40% discount for 6 months — current rate 4.30%
- No arrangement fee
- No Early Redemption Charges
- Free valuation and free legals
- Low exit fee of £75
Elliot Nathan, product development manager for Charcol, comments: "The thousands of borrowers who are coming to the end of a low fixed rate they secured two years ago are in for somewhat of a shock. In some instances, their interest payments will be doubling which is likely to be difficult for some to manage. The problem is that no-one is certain which way rates will move next and many borrowers will be unsure what to do. What we are suggesting is to take a short-term deal with very low costs and wait and see. This deal allows borrowers to move at any point during the initial discount if rates move favourably and all they will pay to redeem is a low deeds release fee of £75.
"The product really does provide the best of both worlds for borrowers. Not only does it offer a low-cost set up, with a free valuation, free legals and no arrangement fee, it offers a low-cost exit at any time. It provides a very timely solution to many borrowers’ issues of simply not knowing what type of mortgage to take at the moment."
