Mortgage lenders are flooding the market with more fixed-rate products in attempts to lock in home-owners who may be tempted to switch to one of their rivals in the coming months, a financial website has reported.
By the middle of this week, there were 2,675 fixed-rate mortgages on the market, which is an increase of 297 deals, or 12.5 per cent, since the start of September, says Moneyfacts.co.uk.
It suggested lenders are giving themselves a mortgage make-over as they are bearing in mind the danger that existing customers could be attracted by a rival.
Some of these customers may be starting to think about remortgaging in order to shelter from expected increases to the Bank of England base rate and keep their borrowing costs down.
While the vast majority of new mortgages being taken out are fixed-rate deals which cushion borrowers against any immediate impact of the base rate rising, around two-thirds of outstanding mortgage balances are held by people who are on a standard variable rate (SVR) deals, according to industry estimates.
Some mortgage holders may struggle to switch because of a lack of equity or tougher borrowing requirements. But brokers anticipate seeing an upswing in people looking to jump off their variable deal amid expectations that the Bank of England base rate will go up from its historic low at some point next year. Moneyfacts said that the average two-year fixed rate on the market has fallen from 3.52 per cent in August to 3.27 per cent.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article