Alliance & Leicester: Fixed-rate mortgages 'safest option'
www.moneynews.co.uk > Mortgages > Alliance & Leicester: Fixed-rate mortgages 'safest option'
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Money News |
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Alliance & Leicester: Fixed-rate mortgages 'safest option'
Fri 7th Mar 2008
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Mark Blackwell, director of intermediary sales at the bank, said the prevalent market view is that with inflation predicted to rise above the three per cent mark this year, the MPC has "limited room for further manoeuvre" on the base rate.
Analysts are predicting further cuts, but not in the immediate future and only to around the five per cent mark, while it is also possible that the MPC may raise rates in order to meet its two per cent inflation target.
Mr Blackwell therefore recommended that borrowers "think carefully about the downside of locking into variable rates" in the current uncertain economic climate.
He added that fixed-rate products are a good option for first-time buyers, people moving house and those refinancing in particular.
Although variable and fixed rates are similarly priced at the moment, he said, any benefits of a variable option "could be eroded" if interest rates rise again in 2009.
The Royal Institution of Chartered Surveyors predicted yesterday that the MPC would lower rates again in May 2008, as the impact of the credit crunch spreads from the housing market to the rest of the economy.
Related News : Mortgages |
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Related News : Alliance & Leicester |
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