How to lock in the best rate on your loan
With interest rates beginning to rise again, borrowers need to take action, says Clare Francis in The Sunday Times. In an ideal world, the best thing to do would be to pay down your debt fast. Failing that, lock in today’s low rates with a fixed-rate mortgage. Ray Boulger of mortgage broker Charcol suggest getting a two-year fix. That leaves you safe until 2006, when he believes rates will start to fall again. Dunfermline building society is offering 4.85% fixed for two years and Alliance & Leicester has a two-year fix at 4.94%. But as Mark Harris of Savills Private Finance points out, “there is little difference between the cost of two-year and five-year fixed rates”, so it seems more sensible to go for the longer-term option”. Newcastle building society is offering 5.2% and the Alliance & Leicester has a deal at 5.29%.
