View more on these topics warns fixed rate customers to switch says one million people whose three-year fixed rate deals are due to expire will be moved to average standard APRs of over 6.5%.

Average fixed-rate mortgages in 2003 had APRs of 4.22%, owing largely to a low Bank of England base rate of 3.5%.

But as interest rates have increased, lenders have raised the APRs customers receive once their fixed-rate deals run out.

That means borrowers who either bought a house or remortgaged on three-year deals in 2003 will risk paying large SVRs. Homeowners paying 4.22% on a 100,000 mortgage on a repayment basis in 2003 would have faced monthly payments of around 545. If they move to a 6.55% rate now their payments will rise to 725 a month. That is an extra 180 a month, or 2,160 a year.

Around 39% of mortgages taken out in 2003 were in fixed-rate deals amounting to 1,059,000 loans. Popularity of fixed-rates is high, with 1.3 million deals struck last year.

Sean Gardner, chief executive of, says: Homeowners who were smart enough to fix their rates in 2003 cant take their good fortune for granted. Interest rates are rising and standard mortgage rates are too.

The mortgage market is different from three years ago, but thats not to say that there arent great deals to be had. Homeowners can keep a low rate if they do a bit of homework and review the market.


Yorkshiremen are nothing like Ebenezer Scrooge

From Philip Holroyd I write regarding Isabelle Kassam’s article headlined ‘Ebenezer Scrooge is a Yorkshireman’ (Mortgage Strategy October 23). As a Yorkshireman I take exception to her comparison. It is a well known fact that Ebenezer Scrooge became a generous benefactor. A true Yorkshireman would never let himself go down such a slippery slope. Philip […]

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Lenders have defended ex-tended early repayment charges following criticism from Hamptons Mortgages. The brokerage has de-nounced lenders that offer low initial rates accompanied by heavy ERCs for borrowers who apply for an extended period following the initial rate deal. It claims that this type of hangover rate is considerably worse value than other deals without […]

India Election Update

What a difference six months makes. Speaking in September last year, we had warned of ‘excessive pessimism’ afflicting the market’s perception of India. Since then, responsible central bank policy from the Reserve Bank of India (RBI), alongside improving global growth, has meant that India’s macro environment is strengthening quickly. The current account deficit has shrunk, inflation is falling and the government has embarked on a heavy dose of much needed fiscal consolidation. As a result, the rupee has been one of the strongest global currencies this year while the market has touched all-time highs, rallying by more than 20 per cent (GBP) since September. This begs the question: are we now in a period of ‘irrational exuberance’? Not yet.


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