Fixed rate mortgages have been dropping steadily for several months with the expectation that interest rates in the UK are now likely to remain low in the long term. However the downgrading of several major banking groups in the UK by the rating agency Moody’s last week is likely to put pressure on the big UK mortgage lenders to increase the cost of these deals.

It could be a flash in the pan though, rates were beginning to rise early this year when the economic outlook was less gloomy but the effects of the Tsunami in Japan and the subsequent concerns over the Eurozone were enough to revert the trend.

What is certain though is that there are fixed rate mortgages available which are several percent lower than the average mortgage interest rate paid by borrowers over the last 25 years so if you are concerned by the possibility of higher rates and don’t have too much to lose by switching to a fixed rate deal there have definitely been far worse times to take a fixed rate.

The rates which include a 2 Year fixed at 3.89% available up to 70% loan to value and at 4.09% up to 75% loan to value have an application fee of just £199 with free valuation and legal work on remortgages or £200 cash back towards legal costs if using your own solicitors. Early repayment charges apply of 3% of loan to be paid until 31/01/2012, and APR for the products is 2.8% On both.

They have also included a 3 year fixed product at a similarly competitive rate.

This is a big departure from the glut of products currently offering headline rates with either £995 or even 2% arrangement fee’s and will surely serve to kickstart the lending industry back into competitive pricing with more than just on paper rate cuts.

The products are also available on new purchases and equally competitive there although the lenders standard valuation and legal fee’s will apply on purchases.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. We do not usually charge a fee for mortgage advice although you do have the option to pay up to 1.5% of the loan amount. Some buy to let and commercial loans are not regulated by the Financial Services Authority.

Valuation fee’s are refunded on completion up to a property value of £1 Million and would be £280 based on borrowing of £100k at 70% LTV. Applicable fee’s are lenders Conveyancing fee of £189, Telegraphic transfer fee of £30 and early repayment charges of 3% of loan to be paid until 30/11/2012.

Whilst this brings them into line with offerings from Abbey it is still some .4% off the current products on offer from the Woolwich.

As usual always consult a Key Facts Illustration before making a decision about a mortgage. For further information on this product or any others please contact us on 0845 4594490 to speak to a mortgage broker.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. We do not usually charge a fee for mortgage advice although you do have the option to pay up to 1.5% of the loan amount. Some buy to let and commercial loans are not regulated by the Financial Services Authority.

There is however a nifty product currently being offered by Nationwide Building Society (one of the few lenders still touting for new business) which allows you to take one of their current tracker products now and switch it to a fixed rate whenever you choose without incurring early repayment charges.

Other providers have similar offerings however there is a difference which sets them apart. The Nationwide will allow you to switch to a fixed rate based on the Loan to Value of the valuation taken when you arrange your tracker, which means that if value’s continue to fall you will not be locked out of new deals.

You will have to pay a second arrangement fee however and you will be restricted to the fixed rates available when you decide to change which could be higher than those available now but if you aren’t sure which way to turn at least this offers a get out clause which normal tracker products will not.