Todays higher base rate means that the current fixed rate deals are higher than the ones homeowners on an older fix have been paying off, but encouragingly the margins between the base rate and the best fixed rates around have never looked better.
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In May 2004, the best three-year fixed rate mortgage was from Derbyshire Building Society at 4.99 per cent 0.74 per cent above the base rate of 4.25 per cent. Despite six increases in the base rate since then, taking it up a huge 1.25 per cent to reach 5.5 per cent, the best three-year fix is now at 5.19 per cent from Portman Building Society, just 0.2 per cent higher than May 2004s best deal.
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The following May when the base rate had reached 4.75 per cent, the best two-year fixed rate mortgage was 4.68 per cent from Derbyshire. Borrowers today may only be 0.22 per cent worse off, with Portman offering a two-year fix at 4.9 per cent or 0.6 per cent below the base rate.
Louise Cuming, head of mortgages at moneysupermarket.com, said: The message is clear borrowers need not panic! While it is true monthly payments will be slightly higher for those remortgaging now, they are getting an outstanding deal when viewed with the base rate in mind. With fixed rate mortgages on the market at 0.6 per cent below the base rate, this is a much better time for those coming to the end of their current fixed rate deal than many would have expected.
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