7 April 2005
A financial service is warning that nearly half a million people with a fixed-rate mortgage could be facing huge rises in their repayments.
MoneyExpert has annoucned that consumers who took out fixed rate deals in 2003 could soon see their repayments soar by £200 a month.
In total, it believes that 450,000 people could be affected.
"Homeowners who took out fixed-rates two years ago received fabulous deals and have done very well," said MoneyExpert chief executive Sean Gardner.
"However the interest rate climate has changed decisively since then and they have to take action or risk a massive rise in their monthly mortgage payments.
"Doing nothing is not an option."
Two years ago the average interest rate charged on fixed-rate loans was just 4.23 per cent.
They have now risen to around 5.5 per cent.
However, the problem is that homeowner's usually have to pay their lender's standard variable rate once they fixed period has run out - this currently stands at 6.64 per cent.
Therefore, MoneyExpert is advising consumers in this situation to check if their current mortgage provider offers any special deals before shopping around as they may be keen to hold on to existing customers.
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