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Mortgage borrowers 'playing waiting game' on rates
01/12/10
Edited by Andy Jowett.Very few residential property owners are switching mortgages at the moment as they wait for changes in the base rate, according to one market analyst.
What Mortgage editor Ben Wilkie said most borrowers are sticking with their current deal because they are paying less than they were thanks to the Bank of England keeping interest rates at a record low of 0.5 per cent.
He added that when a rise comes, it is unlikely to be large or trigger a series of rapid increases, so households will have some time to "work out what is best for them".
However, he noted that fixed-rate mortgages, which are often popular when the base rate is climbing, have "comparatively quite high" charges at the moment due to a lack of competition in the market.
"You are looking at four or five per cent and you were pretty much looking at four or five per cent three years ago when the base rate itself was four or five per cent," Mr. Wilkie said.
According to First Direct, fixed-rate deals have accounted for 25 per cent of mortgage sales so far this year.
