Base rate rises 'will affect fixed-rate mortgage take-up'

Posted: 18 Aug 2009 14:18:46 GMT

An "awful lot of people" will be looking for fixed-rate mortgages when Bank of England interest rates start rising, it has been suggested.

Jacqueline Thornton, financial planner at independent advice firm Re-Financial Planning, said that any such move by the Bank's monetary policy committee will prompt a scramble for the best deals.

At present, she explained, fixed-rate mortgages are relatively high and consumers see them as expensive compared to standard variable rate (SVR) home loan deals around.

"When you balance that up with the fact that when the Bank of England base rate starts going up, the fixed rates we are going to see then are going to be significantly higher than they are now," the expert added.

Ms Thornton also suggested that, currently, peace of mind is more important for some people than what they can be saving on their mortgages.

Earlier this week, advice website Unbiased.co.uk reported that close to five million homeowners are on SVR mortgages.



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