Five-year fixed rates can save money

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Five-year fixed rates can save money

Wed 11th May 2005

Five-year fixed rate remortgage options could yield improved money savings, according to new figures.

Your Move's Remortgage Index has shown that while savings from two-year discounted variable rate deals are continuing to fall, five-year rates are getting more attractive.

First year savings made through switching to the Best Buy1 five-year fixed rate are now £1290, the figures show, up 6.6 per cent from just last month and 5.4 times higher than a year ago.

In contrast, first year savings achieved by switching to the Best Buy two-year fixed rate remained the same over the last month at £1410, with a rise of only 86 per cent from last year.

Jon Round, remortgage analyst at Your Move, said: "Five-year fixed rate deals are getting more and more attractive for people remortgaging relative to shorter term deals.

"Lenders are enticing borrowers with better offers in an attempt to increase business. Canny remortgagers can take advantage of this."

The Your Move Remortgage Index tracks first year savings achieved from switching from a £100,000 standard-variable rate (presently averaging 6.59 per cent), to the Best Buy1 rate in different classes.

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