Categorized | Finance and Mortgage

New Rate Cuts on Five Year Fixed Mortgages

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There have been New Rate Cuts On Five Year Fixed Mortgages recently in the United Kingdom. As a result, rates have been cut to as low as 3.64% for some five-year mortgages. The company offering these rates is Accord Mortgages, and they are part of the Yorkshire Building Society. However, there is a catch. Those looking for this mortgage must put up almost 2,000 pounds as a fee and also pay a 25% down payment on their home. However, there is the option to pay around 1000 pounds and get a 3.84% rate instead. All companies are now getting in on the act, with Nationwide also cutting its rates drastically.

The reason for these low rates is competition amongst lenders. The New Rate Cuts On Five Year Fixed Mortgages are a clear sign that all mortgage lenders are now competing for fewer customers, therefore they cannot afford to charge the same higher rates as there is a likelihood of their being a cheaper option somewhere. This means that borrowers are now rushing to claim these low five-year rates immediately. People are always worried about the rising of interest rates, thus if they can find anything that is lower than 4% and will stay that way for some time, they will grab that opportunity with both hands.

The five-year fixed rates are very appealing because they give both the buyers and mortgagers some security. The buyers are not worried about rises in the rate and mortgagers are not worried that the buyers are going to stop paying and not renew their mortgage deal. Thus, both get what they want out of the New Rate Cuts On Five Year Fixed Mortgages that have been enacted. This is causing a change in trend where more buyers are using the fixed rate options as opposed to the other options they would find more appealing before. According to surveys, about 62% of borrowers are going for fixed rates now.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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