Fixed-rate mortgages continue to fall

Posted in Banking, Mortgages & Property on Tuesday, April 24th, 2012 at 11:10 by Jessica Haynes.

Britons contending with issues of debt management have a basic decision to make whenever they decide to purchase a house.  They need to decide which of the two main types of mortgages is better suited to meeting their current and future needs.  A fixed-rate mortgage can provide borrowers with the security of knowing that their monthly payment will not rise over time.  On the other hand, an adjustable-rate mortgage allows borrowers to see their monthly obligations decline should interest rates in the general economy fall in any significant way.

Deciding which type of mortgage to arrange is a vital consideration since the results of this choice will have financial implications for years to come, or even decades.

Fortunately for British home borrowers, the decision is currently getting easier due to fixed-rate mortgages that are offered at low rates that are declining.  According to official data, the average rate for a five-year mortgage of the fixed rate variety has been on the decline for at least two full years.  Currently, such mortgages can be obtained at interest rates that are less than 5%, a level considered quite low in historic terms.  Moreover, industry analysts are predicting that the status quo will hold steady for some time to come.

An adjustable rate mortgage is usually more affordable than a fixed rate one but when fixed rate terms fall to such low levels, consumers have less need to be able to adjust them downwards in future.  This means that an excellent choice for home buyers in the current market is to take advantage of a fixed rate home loan.

Be Sociable, Share!

Tags: ,

Comments are closed.