Representative APR 1223.6% (variable)- Interest 292% pa (fixed)

Paydayloan123. Loans from 50 to 750. Apply Now.

Right Time for Fixed Rates

Written By On 16/01/2014

More borrowers across the UK are choosing fixed rate mortgage loans deals compared to variable or tracker according to figures provided by the Financial Conduct Authority.

In the last three months of 2013 more than three quarters of borrowers chose a fixed interest rate. That was an increase of over twenty per cent for the same period in the previous year.

Richard Sharp, an external member of the Bank's Financial Policy Committee strongly believes that fixed rates is the best option as the timing is right.

Mr Sharp was addressing a Treasury select committee hearing when he said:

We are now close to zero rate bound, so you have to make a judgement about the future. Certainly, the structure of the UK would have lower risk associated with the housing market if more mortgages were fixed, and fixed for longer.

It sparked rumours of the Bank of England possibly bringing back thirty year fixed rate mortgages.

In December the Building Societies Association said that over a quarter of borrowers are very worried about interest rate hikes. This makes them tempted to opt for a fixed rate to make them feel more secure.

Mark Carney wanted to give borrowers 'forward guidance' when he took over the reins as BOE Governor in the summer. He said interest rates will not rise until unemployment fell to at least the seven per cent benchmark and he hoped it would breed confidence across the nation.

Now that the jobless rate has fallen sharper than expected, much uncertainty has been caused. Ironically, this has had an adverse effect on Mr Carney's original intentions.

Many economists and experts feel that because the Funding for Lending Scheme will no longer be available for home buyers at the end of this month, interest rates can only go one way.