Paul Howard, director of intermediary sales at Portman, said: “We have looked at ways in which we can make our products even more customer-friendly and believe the ‘Switch to Fixed’ option gives borrowers the best of both worlds. Borrowers can take advantage of our two-year discounted product at 4.19 per cent, but if variable rates start to rise, they can switch across to the security of a fixed rate with minimal fuss.”
Tamsin Hemsley, media relations’ manager at Nationwide, which launched its switch to fix option in January, said despite no significant take up of the option, it is still too early for major market movement. “The facility is a safety mechanism, so if the Base Rate does increase, customers with a tracker rate can switch to a Nationwide fixed rate. However, the base rate hasn't changed since August 2005. We would anticipate more customers taking up the facility if the Base Rate does start to increase,”she said.
James Cotton, mortgage specialist at London & Country, admitted the ability to move from variable to fixed without penalty would appeal to borrowers looking for cheap rates, with the option of security. He said: “I think it is a good optional extra. Borrowers may have to pay a fee, but will be able to waive the Early Repayment Charge (ERC), giving the option to transfer onto a fixed-rate deal. However, if variable rates do start edging up, then fixed rates will also change, and people can only take out the deals that are available to them at the time.”
