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How lenders manage fixed-rate mortgages

16/01/2007

Today mortgage lenders have come together with a decent fixed-rate mortgage for homebuyers protecting them from interest rate inflation.

The Moneyfacts.co.uk saw that the Bank of England rose the base rate few days ago by 0.25%, this has caused building societies and banks to sort out fixed-rate deals for homebuyers.

Egg and the Portman Building Society have the best rates so people are choosing to go with this firm. The Portman Building Society pulled fixed deals on Monday in accordance of a repricing exercise.

A manager from the building society said, the new range – which will have rose rates as a total of the base rate change – is in progression.

Julia Harris the mortgage analyst said, "So has there been a flurry of customers snapping up these 'cheap' deals, causing the societies to exhaust their tranches of fixed rate funds? Or could it be an opportunity to re-price, allowing a larger profit margin?
"With a further rate rise still on the cards for 2007, those customers on a tight budget will need to act quickly before more of the current best buy fixed-rate deals vanish."

She stated that "cheap" mortgage deals with short-term fixed rates and fewer than 5% could disappear from the mortgage world in the future or maybe lenders could pass the total costs on to consumers when arranging a mortgage deal or just add extra product fees when remortgaging.