Mortgage Broker John Charcol claim variable rate mortgages are still a better deal for consumers, despite expecting another rate rise before the end of the year.
John Charcol today released their mortgage best buy tables with Saffron’s offering of a 2.14% discount for two years topping the list of variable rates. Woolwich came top of the fixed rate table with an initial rate of 5.39%, rising to 6.14% after one year.
Commenting on the latest deals, Drew Wotherspoon, head of communications at John Charcol, says: “it is still John Charcol’s opinion that there is better value to be had in variable rates. We do not anticipate bank rate rising beyond 6%, and even that is up for debate after reading the latest set of minutes from the Monetary Policy Committee which recognise that most of the impact is still to be felt from the recent run of rises.”
Wotherspoon says that many of the best fixed rate deals have been snapped up recently and there are few left for borrowers to take up.
He says: “the gap between fixed and variable rates has shrunk over the last week, with all of the variable rates that were at least half a per cent below bank rate being withdrawn. With these going, it really is a case of size matters, with some deals offering lower rates with big fees, and others more modest fees but slightly higher rates.”
John Charcol advises consumers to take fixed rate deals if they need the security this type of mortgage offers. Otherwise, borrowers may be better taking a variable rate deal with the prospect that rates may go down in the next few years.
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