In a fix over home loans by Finance News Bulletin

Published: 27/02/07

Council of Mortgage Lenders figures show that more than 60% of new mortgages taken out in Britain are fixed–rate dealsset mortgages offer the safety of knowing what monthly repayments will be and the most popular type of home loan is the two-year fixed rateBut our feel affection for affair with the a two-year loan is being tested by the rising price of remortgaging when the first deal runs out - making five-year fixed deals look increasingly attractiveA push of five-year offers are obtainable with similar, or lower, interest rates than their two-year fixed counterparts, and borrowers can put aside by not having to chase out a new deal as often

The cost of arranging a mortgage has risen by 125% over the past three existence, from an average of £281 to £634, according to research by contrast firm mformcouk And the cost of remortgaging has risen by 91%, from £106 to £202

This has left the average borrower paying £449 more to take out a new loan than they did in 2003, addition substantially to the cost of a fresh mortgage for those searching around every two existenceEamonn Rice, chief executive of mform, said: 'When choosing a mortgage, it is very important to look beyond the caption rate Some of those with the lowest rates have the uppermost application and exit fees and the least flexible terms and circumstances'While exit fees generally apply across all of a lenders' mortgage range, the highest agreement fees are often found on the best two-year fixed speed deals

It is not strange to encounter arrangement fees of £1,000-plus on loans offered by many lenders Add to this a £200 way out fee bill and the price of valuations and legal fees, and the money saved by changing your mortgage every two years can be wiped outHalifax's most excellent two-year fixed rate mortgage at 499% comes with a £999 arrangement charge and Portman Building civilization's has a five-year fix also at 4

99%, but with a £699 fee Halifax's two-year fixed rate without a charge is at 549%, while Portman's charge-free five-year fix has a speed of 515%

But experts say borrowers would be making a mistake to take the longer fix alternative just because it will save money on monthly repaymentsJames yarn, of mortgage brokers London & Country, says: 'At the moment they're looking good but, as ever, the tale is don't just go for them because they're cheap Go for a five-year fix because it is right for you'If you're content to fix for five years then it does look very spirited, but it should be because you want the security of fixed payments for five years

If you want to move home, or increase your borrowing, then it may be better to go for a shorter deal that matches your situation'If you are choosing a longer mortgage present, the majority of five and ten-year fixed speed deals are portable, allowing borrowers to move home and take their existing loan with them But any additional borrowing will be at the lender's future rate not the current deal offerOne option for those seeking better flexibility is to take an offset mortgage, where savings and current explanation balances can be set against the mortgage balance to lower repayments but then haggard back at a later date

Yorkshire Building Society currently offers an counterbalance mortgage fixed for five-years at 529% with a £595 arrangement feechoose a loan word 12 months (1 year) 24 months (2 years) 36 months (3 existence 48 months (4 existence 60 months (5 existence 72 months (6 existence 84 months (7 existence 96 months (8 existence 108 months (9 existence 120 months (10 years)Please select a kind of insurance Life insurance Home and inside Car Breakdown services Health - medical Health -

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