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Price of fixed-rate mortgages drops

27 January2009

Various mortgage providers have recently reduced the cost of their fixed-rate mortgages.

As The Guardian reports, some 'major names' have cut the price of their fixed-rate mortgage deals, despite having recently made their tracker mortgages more expensive - or withdrawn them altogether.

The cheapest two-year fixed-rate mortgage is currently the deal from NatWest / Royal Bank of Scotland, which charges new buyers an interest rate of 3.49%. Notably, this mortgage is now available to people with a 25% deposit, rather than the 40% the bank had previously required.

"A significant factor is the length of the mortgage," said a mortgage expert for Think Money. "Two-year fixed-rate deals may charge a lower interest rate, but some homeowners prefer the stability that comes with a five- or ten-year deal.

"It's a difficult decision, as different people have different ideas about where the mortgage market is heading - some are keen to 'grab' what they see as a low rate today, while others are prepared to wait and see, hoping the cost will come down further."

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Think Money work with a panel of lenders to offer a range of mortgages. If you are considering taking out a mortgage, contact one of our expert mortgage advisers today.

Tags: mortgage, fixed rate mortgage, tracker rate mortgage, fixed mortgage, tracker mortgage, Nat West, Nat West mortgages, Nat West fixed rate mortgage, Royal Bank of Scotland

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