Things get tough for homeowners looking for a replacement deal

Posted under General by Jermaine

Mortgage market experts warn that the big jump recorded in the cost of fixed-rate mortgages was bound to hit consumers hard. Darren Cook, a mortgage expert with Moneyfacts, warned that consumers, needing a mortgage, would face a stark choice, with the SVR (average standard variable rates) now costing 6.66 per cent.

Homeowners, who sought two year fixed-rate deals a couple of years ago, were getting rates close to 4.5 per cent. However, with rates now heading northwards, consumers are in for a rude shock when they start looking for a replacement deal. Many - forced on to their lender’s SVR - could witness their payments go up sharply, by several hundred pounds on a monthly basis.

The mortgage arm of Barclays, Woolwich, had already decided to withdraw its two year fixed-rate deals. Nationwide’s increase that has just come into effect, takes its most expensive two year fixed-rate deal to 7.85 per cent for those customers borrowing between 90 per cent and 95 per cent of the property’s value.

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