Justine Tomlinson, marketing director, explains: “In mid 2003, when rates were at their lowest level, some of the more competitive 2 year fixes on offer had mortgage rates of 3.54%. On a £100,000 repayment mortgage over 25 years that gives payments of £507.81. Standard variable rates today are typically 6.75%, which means a jump of nearly £200 in monthly repayments to £699.05.
“There are, however, a number of excellent deals on offer which can help reduce payment shock. For example, The Portman has a 2 year fix at 4.68% with no overhanging early repayment charges – giving a monthly payment of £572.45. The Bristol & West is also marketing a 2 year fix which helps borrowers meet the cost of fees. It is priced at 5.19%, giving a monthly payment of £602.58.
“This is a great opportunity for brokers to provide their clients with helpful money saving advice about ways in which they can reduce the impact of rising mortgage payments.”