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Consumers urged to shop around for fixed-rate UK mortgages

Date: Thu, 13 Apr 2006

Consumers are being advised to make sure they shop around to find the most competitive fixed-rate UK mortgage as lenders increase the cost of borrowing.

New figures from comparison service moneyfacts.co.uk suggest that many UK mortgage providers are planning to increase the cost of borrowing on a fixed-term basis.

"Over the past few months we have seen many lenders tweaking their fixed rate two and three-year ranges, mostly with minor rate increases of 0.1 per cent," said Rachel McKay mortgage analyst at comparison service moneyfacts.co.uk.

"However, over the last week our researchers have seen several lenders step up a gear, increasing rates on three year deals by up to 0.31 per cent."

The Bank of England had been largely expected to lower the base rate of interest and therefore many lenders had based their fixed-rate deals on these projections. However, it now looks more likely that the Bank of England will keep interest rates on hold for the foreseeable future – meaning UK mortgage providers are having to rethink their fixed deal offers.


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