The fixed rate versus tracker debate has been hotly contested over the years and shows no sign of letting up, with low interest rates continuing.
I’m sure many borrowers are sick of tales of how little some people are paying on tracker rates compared with fixed rate deals secured at the same time.
But given the prevailing ambiguity surrounding interest rates rises and the high number of competitive fixed rates available it seems that fixed rate deals are back in vogue.
Moneysupermarket.com says that borrowers looking for the security of fixed repayments or undecided whether to move off their SVR should consider fixing, as average fixed rates have fallen to their lowest level since 2007.
The comparison website reports that since April 2008 the average rate for two-year fixed deals has fallen by 3.36%, with rates currently at 4.62%.
Three and five-year fixed rate deals have also seen their averages fall steadily since September 2009, after originally rising following the base rate cut in March 2009.
Of course, while it’s good that competition and low swap rates are driving better deals advising on such decisions remains tricky. Brokers need to take into account their clients’ attitude to risk when looking at such deals.
There are low SVRs and a lack of borrowing options to consider, especially for those with impaired credit. But the time could be right to look at fixed rate deals again.