Five-year fixed-rate mortgage 'may be more prudent'

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Five-year fixed-rate mortgage 'may be more prudent'

Wed 11th Jun 2008

The financial advice website notes that inflation is currently running well above the government's target at three per cent, while previous cuts in the Bank of England base rate have had little impact on mortgage rates.

With inter-bank lending rates also remaining high, it predicts that mortgage rates are likely to rise.

In addition, the website stated that the current average rate for two-year fixes stands at 6.68 per cent, compared to 6.66 for a five-year fix.

"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," Moneyfacts concluded.

In May, Abbey reported that the nation's appetite for five-year fixed-rate mortgages had increased for the third consecutive month.

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