Homeowners should fix

Homeowners should take advantage of lowest fixed rates in a decade, according to Alliance & Leicester Mortgages.

Research by Alliance & Leicester Mortgages reveals that homeowners currently on their lender's SVR risk missing out by not taking the chance to fix now at a low rate. With fixed rate deals now available from as low as 2.99%, A&L is urging borrowers who need to remortgage to act quickly in order to secure some of the best deals currently on offer for a limited period only.

The research revealed that eight out of ten (81%) borrowers currently on their lender's SVR deal have no immediate plans to search for a better deal, with a further 264,000 existing SVR holders (14%) planning to wait until interest rates and house prices start to rise again.

Alliance & Leicester commented: "It is perhaps unsurprising that some homeowners currently on SVR deals are reluctant to commit to a new mortgage but past experience shows that fixed rates tend to increase in price before the base rate, in anticipation of the base rate increasing. Although SVR deals can be favourable for the short term, once interest rates start to rise they can become unaffordable very quickly. In comparison, as well as giving borrowers the security of low, regular monthly mortgage repayments, opting for a fixed rate deal will also protect homeowners from any future rate rises."