Mortgage rates set to rise?

Not all lenders are cutting rates. Last month, the Woolwich – now part of Barclays – upped the cost of some of its home-loan deals by up to 0.3%, blaming the rising costs of funding.

Ray Boulger at mortgage broker John Charcol told The Sunday Times that fixed could fall as low as 3.5% from here - and sure enough a 2.99% rate is now on offer. Yet "sooner or later rates are simply going to have to rise, and rise sharply", he adds. "While convincing someone who's currently paying next to nothing to take a fixed-rate between 4% and 5% is as challenging as selling ice to Eskimos, in the long-term there's every possibility they'll be better off."

My view
I have advised many clients to reserve rates - which you can do with many lenders for up to 6 months in advance - its a case of hedging your bets because you can always pull out if the market looks like its going to carry on staying low.


Article source Money Week The full article


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