Inflation keeps increasing, putting further pressure on already stretched monthly household budgets. Whilst there isn’t much we can do about it, homeowners can at least fix their contractor mortgage repayments.
And there are some good deals to be had, if you’re prepared to shop around. For example, the Legal & General Mortgage Club has teamed up with the Cambridge Building Society to offer a range of fixed rate products.
There’s a total of four two year fixes starting with a 90% LTV deal at 5.89% through to a 75% LTV at 3.49%. The mortgages are fixed until October 2013 and come with a free valuation fee. The application fee is £999 but only £399 of that is payable upfront.
Although these are reasonably good deals, they are only available to people in East Anglia, and it is possible to find better deals if you shop around.
The best five year fix at present comes from the Nationwide. However, it is only available to people who can put down at least 30% deposit. The 4.39% fix attracts a £900 fee. The total cost of this mortgage, taking the arrangement fee into consideration, is £50,463.30 on a £150,000 loan. This compares favourably with a 4.59% five year fix from First Direct which would cost £50,684.80, including the £199 fee, over the same time period. Nationwide also provides a free standard valuation and free legal fees providing you use on of its in-house conveyancers.
The jury is still out as to whether it is sensible to lock yourself into a fixed rate deal but as the Bank of England is guaranteed to raise interest rates eventually, it could pay off. However, make sure to check if there are any early repayment charges. The Nationwide product attracts a 5% charge if you overpay more than £500 a month.
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