Colin Bell, Chief Operating Officer of Purely Mortgages says:
“Whilst we expect to see some competitive fixed rates soon, trackers are proving most popular and are already at very low levels. Borrowers are throwing money away by waiting to see if better rates are round the corner, someone on a £130,000 interest only mortgage who has waited a couple of months to remortgage may already have wasted over £500.”
Commentary from Purely Mortgages: "There was a bit of rate movement last week but nothing of any great significance. The Halifax reduced its fixed rates but still remained off the mark. Other movers during the week were BM Solutions with its self cert rates, Leeds & Holbeck and Mortgage Express.
"With base rate likely to be moving in a downward direction this year, they represent best value for money if payment stability is not required. Fixed rates need to move to below 4.20% in the two year market to compare favourably with the best two year trackers (to put this into context, the best two year fixed rate without tie-ins, up to 95% LTV, is currently 4.74%).
"The Abbey’s 0.31% below Bank Base Rate and the Alliance & Leicester’s 0.11% below Bank Base Rate (with free legals, free valuation and no arrangement fee) have a payment rates of 4.44% and 4.64% respectively, a couple of 0.25% reductions in Bank Base Rate will make both of them cheaper than a 4.20% fixed rate.
"A lot of potential remortgagers have been awaiting new rates, however for those looking at tracker rates they are already out there and waiting. There are too many people who are waiting for the best rate in the world - and while they wait they are losing so much money month on month.
"For example: £130,000 interest only mortgage with Halifax paying variable rate of 6.75% = £731.25 p.m.
"£130,000 moving to the Abbey 0.31% under Bank Base Rate = £481 p.m. – a monthly saving of £250.25
"If you delay by two months you have lost £500.50 – which represents 0.1925% over two years.
"Therefore for every two month delay the tracker rate needs to move by 0.2% - i.e. the Abbey rate needs to become 0.51% under bank base, if you have been waiting since November, then it need to become 0.71% under."
Current ‘Best Buys’
Lender
Rate
Term
Initial Rate
APR
Reverts To
Incentives (if applicable)
Early Repayment Charges
Fixed
Portman Building Society
2.39% Fixed
Until 28/02/07
2.39%
6.2%
6.74%
Beyond term
Portman Building Society
4.74% Fixed
Until 28/02/07
4.74%
6.7%
6.74%
Within term
Clydesdale (Semi Exclusive)
4.90% Fixed
2 Years
4.90%
6.8%
6.84%
Free Valuation & Legal Fees Within term
National Counties
4.79% Fixed
Until 1/04/08
4.79%
6.50%
6.74%
Within Term
Portman Building Society
4.89% Fixed
Until 28/02/2010
4.89%
6.3%
6.74%
Within Term
Discount/Tracker
Lambeth
2.45% discount from SVR
Until 30/01/07
4.49%
6.9%
6.94%
Within term
Abbey
0.31% under Bank Base
2 Years
4.44%
6.7%
6.75%
Within Term
Alliance & Leicester (Semi Exclusive)
0.11% under Bank Base
2 years
4.64%
6.5%
6.84%
No lender Fee, free legals and refund of valuation fee
Within term
BM Solutions (Semi-Exclusive)
0.14% Over Bank Base
3 Years
4.89%
6.0%
6.0%
Refund of Valuation Fee Within Term
