Get your fix quick. The downgrading of UK banks likely to increase fixed-mortgage rates
Author: Andy Bedford » Publish Date: 12 October 2011
If you have been considering fixing your mortgage by remortgaging to a new deal, then now might be the prime time to do it.
Fixed-rate mortgages have been dropping steadily for several months with the expectation that interest rates in the UK will 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, 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 per cent 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 certainly been far worse times to take a fixed rate.