Loans Information

June 21, 2009 No turning back for fixed rates by Gill Montia Latest figures from Moneyfacts.co.uk show a sharp rise in the cost of a two-year fixed-rate mortgage during the past week. According to the financial website, the average cost of a two-year fixed-rate deal increased by 0.16% between Monday and Friday, to 4.90%. Meanwhile, five-year fixes increased by an average 0.21% over the same period, to 5.82%. Nationwide began the round of increases and has been followed by other leading lenders including Abbey, Cheltenham & Gloucester, Halifax and Yorkshire Building Society. Fixed rates are determined by money market swap rates and mortgage experts have been warning for weeks that swap rates are set to rise, reflecting as they do forecasts for the future direction of interest rates. Unfortunately, lenders’ margins have also risen since fixed-rate deals recently bottomed out from their record high levels of June last year. Moneyfacts analyst Michelle Slade explains: “In June 2008, when the average rate hit its peak the margin over swaps was 0.76%

Original post:
No turning back for fixed rates