5-year fixes £12,700 cheaper than 2008
The cheapest rate is 2.14% with a £1,675 booking and arrangement fee compared to 4.89% with £1,094 in fees in November 2008.
Over the 5-year period someone borrowing £150,000 on the cheapest deal will pay £40,400 in interest rather than £53,100 in 2008.
Dan Plant, consumer expert at MoneySuperMarket said: “The current mortgage climate is the brightest it’s been for some years, with rates at an all-time low. However, fervour about a potential rate rise is likely to make lenders jittery, and we could see them pricing this into their available deals soon.
“If you are in a position to fix right now, doing so will get you security at a cheap rate. But even if your current deal doesn’t end until December, many lenders will let you reserve rates that are available right now, for up to six months for a small fee. If you are able to do this, you could ward off the possibility of a huge jump in repayments, which you may see if you waited till your deal ends.
“Of course, buying a house is a huge investment, and prospective buyers must not rush into any decisions. When comparing mortgages it’s vital to work out the total cost over the term of the deal, taking both rates and fees into account.”
It’s a similar case with 2-year fixes which are £6,000 cheaper. The cheapest 2-year fix is 1.05%, down from 4.79% in November 2008. In 2008 borrowers would have paid £21,600 but now that figure stands at just £15,700.
Last week the Governor of the Bank of England Mark Carney indicated that a 2015 rate rise isn’t out of the question.
For borrowers on a typical standard variable rate of 4.84% with a £150,000 25-year loan a 0.25% jump in the base rate would increase monthly payments from £863 to £885.