As the housing market remains quite hot towards the end of the summer, many house owners are still in pause mode, waiting to see the outcome of a possible increase in the base rate.  The Bank of England has stated the rate will be increasing in the coming months, but no one can clearly give indication of the exact date of the increase.  The MPC will be voting again soon in the monthly meeting to possibly determine the date of change for the base rate.  In the meantime, house owners will remain poised to make a move, or not.

Many lenders still are making three year fixed mortgage deals available.  In some cases, these deals are now cheaper than five year deals which are typically promoted quite heavily.

The average three year fixed deal now costs a house owner less than 3.8%.  This is down from 3.83% which could be found in the month of January.

Sylvia Waycot, of Moneyfacts.co.uk, commented on the deals now available, saying: “Attractive deals are available, but borrowers need to look beyond the overtly marketed deals. Three-year fixed rate deals can easily be overlooked as they tend not be the norm or readily marketed, and yet they are as viable a product as any two-year deal.

“There is no obvious reason that springs to mind why the three-year fixed should be lower priced than the two or five-year equivalents. In fact, all logic suggests that two and five-year fixed rates should be cheaper because the turnover of products is greater, the competition is greater and the majority of borrowers looking at fixed rates as an option are fixated on only two and five years.”

Waycot added: “The less charitable may suggest that it is easy to hide the best rates in under-promoted products, knowing that the focus can be steered to the more profitable lines without too much effort.”