Fixed-rate mortgages cost on rise
Updated on 16 May 2008
Fixed-rate mortgages could cost homeowners £300 more a month than two years ago, figures have shown.
It also emerged that people trying to take out new mortgages or refinance their home loans face the highest fixed-rate deals for a decade.
Figures compiled by personal finance website MoneyFacts show that the average rate for a two-year loan has hit 6.64%, up from 4.34% two years ago.
It means that someone coming to the end of a mortgage on a £150,000 house they took out two years ago will see their average repayments rise by £206 a month to £1,026.
Those with a £100,000 mortgage will find average repayments rise by £137 to £684 a month, while homeowners paying back a £250,000 loan will have to pay back an average of £1,710 each month - £343 more than two years ago.
MoneyFacts' figures also show that someone taking a typical five-year deal in 2003 on a £250,000 home loan will have to stump up almost £500 more when it comes to their new deal.
It is estimated that about 1.4 million homeowners will see their fixed deals expire this year.
But they will have to contend with the news that fixed rate deals are the highest for 10 years, according to figures from the Council of Mortgage Lenders.
In 1998, the interest rate average for fixed rate mortgages was 6.74%. Standard variable rates, meanwhile, were higher in 2000, when they hit an average of 7.21%.
The findings will come as bad news for first time buyers as well as existing homeowners.
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