Long Term Fixed Rate mortgages
In his pre-budget report, the Chancellor Alistair Darling, announced that he wanted to increase the availability of a longer fixed rate term on mortgages. He reckons this is one of the ways of making home buying a more affordable process and create stability for those with homeowner loans.
A mortgage with a fixed rate of interest over say 10 years, which is what Darling is proposing, is a great way to provide a bit of stability in these unsettling times within the mortgage market. It also means that homeowners will know exactly what they are paying month to month over the set term. This makes it easier to plan, budget and save as you will have no nasty surprises from year to year.
Some homeowners have really struggled the past year or so, after having such a low base interest rate, many applied for mortgages beyond their means and were given them. As the Bank Of England increased the rate 5 times over 12 months, the rise in homeowner repayments tipped some people over the edge. Repossesions were going up and many people were borrowing more just to keep up with repayments.
I welcome this bit of news about introducing long term fixed rates, however at present you will find over 140 of these products already on offer in the UK. It isn't that they aren't available to us, it's just that we don't seem to want them. They only account for about 3% of all our mortgages. Why is it that we seem to prefer short-term offers for 2 years when it is clear, these are not the most effective option for many of us.
Related Articles
With property prices on the increase, it can be difficult for some people to make that initial move and buy their first property. It's not such a problem for married couples or those who are co-habiting as they can apply for a joint mortgage. By combining both the applicants incomes, you will generally be given a bigger mortgage than if you were buying singly. A joint mortgage also means it could be easier to save up an initial deposit, if there are two of you doing it as a joint venture.
Read on...
A New Year and a new start to your finances. It can be pretty depressing to see how much money you owe and how much interest you pay on a monthly basis. Money you could be saving or using to enjoy the finer things in life. Especially with the current credit pinch that we are feeling, as lenders tighten up their criteria and are getting tougher on missed loan re-payments, it makes absolute sense to clear your debt as soon as possible.
Read on...
It doesn't matter if you have had mortgages before or not, it is still a big financial decision to make. Even more so nowadays with the huge choice of mortgages available. It can get confusing with the different options being offered. The most important two things to decide on are what loan type do you want to get and how do you wish to repay the loan. Here is a guide to what options are available to you today.
Read on...
A loan repayment holiday is a period of time - normally at the
beginning of the loan term - where the lender allows the
borrower to avoid loan payments. It's a feature that many lenders offer to provide flexibility to their customers. Of
course, not everybody decides that they need to take a payment holiday. However, many borrowers do choose to take
advantage of the option.
Read on...
The world of finance has a host of different products and offers out there to entice the general public to want them. Some are very good value, some are very useful but there are always a few bad grapes in the bunch. So here is a short guide on the bad deals in finance - the ones to avoid.
Read on...
Related News Items
The latest data is in and it reveals that house prices in the UK have dropped for the second month running, albeit only a slight drop of 0.5%. Despite this small downfall, the prices of property around the country still rose by 4.8%.
Read on...
Legal & General, one of the largest insurers have announced a shock new tactic when it comes to arranging the pension payouts of their customers. The initial pilot stage has just finished, so only time will tell if this will affect the number of new customers they get.
Read on...
Many homeowners are finding they have been caught short with their fixed rate mortgage deals. The most popular type of mortgage deal seems to be the 2 year fixed rate mortgage, however many people find themselves getting less than the 2 years they have signed up for.
Read on...
The base interest rate for the UK was reduced last month by the Bank of England to try and stabilise the nations finances and regain some public confidence. This was great news for those with mortgages as many banks and building societies also dropped their interest rates for customers to benefit. Not so good for savers though.
Read on...
There were huge sighs of relief all over the UK this morning as the Bank of England announced that they were cutting the base interest rate back down to 5.5%. This was after the base rate was raised to 5.75% earlier this year, the highest it has been in 6 years.
Read on...
