Experts recommend fix rate loans
In view of the global credit crunch and its fall out in the UK, mortgage rates are starting to creep up again. The interest rates in case of personal loans, homeowner loans and mortgages have already seen an upward rise.
Experts are advising the home owners to stick to fixed rates when taking out homeowner loans. Many lenders in the UK loan market have withdrawn their mortgage offers of over 95 per cent loan-to-value. The lenders are tightening their lending conditions. Last month, Abbey was the first UK High Street bank that raised its mortgage rates as a direct result of the continuing turmoil in the financial markets.
Fixed rate loans and mortgages can save you from any further rise in the interest rates. The figures from the Council of Mortgage lenders show that 79 per cent of all mortgages were fixed in July this year. The corresponding figure was just 18 per cent five years back.
The recommendation by experts to opt for fixed rate mortgages is a change from a few weeks ago. At that time, the base rate was kept on hold and inflation was coming down, prompting the experts to advice variable rates in anticipation of slash in base rate. However, the credit crunch has changed the situation completely.
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