11
Jun
Five-year mortgages 'offer more stability'
Borrowers may find that in the current market, a two-year
fixed-rate mortgage no longer provides them with an adequate level
of security, Moneyfacts has claimed.
The financial advice website suggested that mortgage rates could
increase further. It cited the fact that inflation is currently
running well above the government's two per cent target and that
previous cuts in the Bank of England base rate have had little
impact on mortgage rates.
Also, Moneyfacts noted that the average rate for a two-year
fixed-rate mortgage currently stands at 6.68 per cent, compared to
6.66 for a five-year product.
It concluded: "There is now new scope for a borrower to possibly
take a more prudent approach to look past previously popular two
year deals and look for longer term stability."
Some may have already heeded this call; in May, Abbey reported that
the nation's appetite for five-year fixes had increased for the
third month running.
