Moneyfacts: Mortgages levels are worrying

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Moneyfacts: Mortgages levels are worrying

Fri 27th Jun 2008

Rates on fixed interest mortgages are worrying as many homeowners coming to the end of their current deals are likely to see large increases in their repayment levels.

This is the view of the financial information service Moneyfacts which is hoping that the recent decrease in swap rates will be passed onto consumers by mortgage lenders.

Moneyfacts points out that the average rate for a two-year fixed rate mortgage is currently 7.02 per cent, while the average rate for a five-year fixed deal is 6.82 per cent.

Meanwhile the rate on an average standard variable rate mortgage also stands at 7.02 per cent, meaning homeowners have little choice but to pay higher interest charges.

"These are continually worrying times for anyone coming to the end of their current mortgage deal," said Darren Cook, mortgage expert at Moneyfacts.

However he said there may be some light at the end of the tunnel as swap rates fell by 0.16 per cent last week to 6.36 per cent, which could result in rate cuts for consumers.

Last week the Woolwich became the latest lender to raise its mortgage rates whilst also temporarily withdrawing its two-year fixed rate mortgage deals.

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