However Katie Tucker of John Charcol has pointed out that the MPC's reluctance to cut interest rates, evident from the 8-1 votes in favour of holding it at 5.75 per cent, means that the current competitiveness of fixed rates may be short lived.
Tucker said: “The minutes from October’s MPC meeting indicated that they felt the economy is not slowing at a sufficient enough pace to warrant a rate cut just yet. Although the movement in interest rates over the next two years is expected to be generally downward, the eight to one vote suggests this is unlikely to happen for a few months yet.
"Coupled with the fact that two-year swap rates closed at 5.91 per cent on Tuesday, up 0.14 per cent from two weeks previously, means we’re unlikely to see a fall in fixed rates over the short term. Competitive rates are being issued and withdrawn quickly, so we would urge anyone currently looking for the security of a fix to act swiftly and snap up remaining deals before they disappear.
“Last week’s chart topping mortgage rates at Woolwich and Darlington were used up in days, and the same should be expected of the new ones from Abbey and Chelsea. Abbey’s two year rate of 5.58 per cent is fixed until 2 January 2010 and available up to 80 per cent loan-to-value, for a £995 fee which can be added to the loan.
"It also comes with a free valuation and legals for remortgages, making it an easy switch for many borrowers who are coming to the end of their old fixed rates now. It is also flexible, allowing overpayments, underpayments and payment holidays for people who want to be able to put in ad hoc commission or bonuses to build up a reserve, and then use that money to their advantage later.
"Chelsea has released a very low fixed rate at 4.99 per cent which would suit borrowers whose priority is to keep the monthly payments low by loading their outgoing at the beginning, by paying a premium fee of 2.5 per cent to secure that rate, particularly as the fee can be added to the loan.
“For borrowers who wish to take advantage of any possible fall in Bank rate in the next two years Halifax is offering a discount of 0.11 under base giving a pay rate of 5.64 per cent, for what is now a relatively small fee of £499. Halifax also doesn’t charge an exit fee, which means that borrowers are potentially saving around £180 at the end of the loan too. Saffron’s two year discount of 2.40 per cent from its SVR giving a pay rate of 5.19 per cent has no Early Repayment Charges so is ideal for borrowers who want to remortgage to a better rate now, whilst being free to remortgage to a fixed rate even within the next two years.”
