26.06.08 by Andrew Montlake

In A Fix

Those kind and gentle folk at Moneyfacts have released information that has been leaped upon by a hungry media pack that the average fixed rate is now over 7%.

Well, I guess if you take into account all the higher sub-prime rates that are still available then this may be the case, but in reality I am not so sure for the average punter.

I have just done a search on our ultra-smooth Mortgage Brain system and actually the first, hold on let me count ..., 67 products available are all under 7% - which represents quite a big choice. In fact 34 of these are under 6.75% and have no extended tie-ins.

I know it is not the 3.99%'s we had a couple of years back, but it's also not the 8% - 10% of a few years before that. The release from Moneyfacts could therefore be construed as a bit misleading and plays to the medias thirst for bad news.

Anyway, saying that there are chinks of light in that some tracker products have come down recently from people like C&G and Halifax to around the 5.99% level.

In my book these represent good value as I still do not believe rates can afford to rise significantly in the medium to long term, and if there is a rise it may be one of 0.25% this year, with rates then predicted to fall again next year.

This makes tracker rates better value unless you do need the security of a fixed rate.

My highly respected fellow market commentator Ray Boulger has also been mentioning similar things and in fact he goes as far as suggesting that we may be at the peak of the fixed rate cycle and sees no reason why lenders should not increase their lending in this market to benefit from the higher margins now available.

So, could this be a turning point ? Watch this space ...