Time to compare fixed rate mortgages?

Now could be the time for home owners to compare fixed rate mortgages and switch to a better deal. November saw the ‘to fix or not to fix’ mortgage debate enter new territory as the Libor rate soared to a two-year high. Fixed rate mortgages have become more attractive at a time when a low 0.5 per cent base rate should be making trackers a more appealing option.

The Bank of England base rate has remained at 0.5 per cent for the last 32 months. However recently the three-month London Inter-Bank Offered Rate (Libor) reached one per cent which means the gap between the Bank of England’s Base Rate and Libor is vast.

The Libor inching upwards sends out the message that banks are not confident about lending to one another, which has a massive impact on the mortgage market. The result is lenders are putting up mortgage prices and tracker mortgages seem to be the main target. The key for home owners is to shop around, compare fixed rate mortgages on offer and look long term.

In November the Chelsea Building Society increased the interest on some of its most attractive tracker mortgages, ING, Skipton Building Society, Woolwich, Nationwide and Santander have also introduced changes on their products.

Home owners who shop around and compare fixed rate mortgages will find deals from lenders such as The Leeds Building Society, who are offering a rate of 2.29 per cent until January 2014. This two-year deal is for borrowers with a deposit of at least 30 per cent and comes with a £1,999 fee.