"As swap rates, the rates that determine the pricing for fixed rate loans, have been rising for some time now, borrowers have seen the knock on effect of fixed rate mortgage rises. At their low point, in July 2003, borrowers could fix for 2 years at 3.19% and for 5 years at 3.85%. Equivalent deals in today’s market have risen to 5.19% and 5.59% respectively, an average increase of approximately 2%.
"However, in the last few weeks, swap rates have fallen from their recent high. 2-year money is now priced at 5.3%, down from 5.5% this time two weeks ago, and 5-year money is at 5.45%, down from 5.65%.
"What this means for borrowers who are currently arranging a fixed rate is that, if they can, they might consider waiting just a few weeks before committing to a deal as there is every possibility that there could be a cheaper deal on offer. If this trend continues, it is highly likely that 2-year deals will fall below 5% again and fixed rates will start to become competitive once more. Our advice is very much wait and see for a little while and see how lenders respond. Even a 0.2% fall in rates would mean someone with a £100,000 mortgage would save over £150 a year."
