Mortgage renegotiations still increasing rates
The credit crunch effect of restricting inter bank lending, which is making fixed term mortgage deals so hard to negotiate, is continuing to leave a gap between the Bank of England base rate and actual lending rates.
Many previous mortgage deals are coming to renewal, yet even home buyers with an impeccable credit rating and repayment history are having to look at deals which represent a rise in monthly repayments.
Darren Cook, mortgage expert at Moneyfacts.co.uk, comments: "It is an extremely worrying time for anyone coming to the end of a fixed rate deal.
"Borrowers coming to the end of a three year fixed rate deal, looking to fix for another three years could see a £158.23 increase in their monthly repayments (on a £150,000 mortgage), equating to an additional £5,896.28 in true cost over the three years. Two, three and five year fixed rate best buys are now entirely dominated by deals over six per cent. There are still a handful of sub six per cent deals, but these come with such high fees that any benefit from having the slightly lower rate is likely to be wiped out by the fee. There doesn't appear to be any let up in the misery for borrowers."
July 07th 2008
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