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Home loan rates 'not expected to rise short-term'

24 Jun 2009

There is no reason that mortgage rates should continue rising sharply in the short-term, an expert has said. Ray Boulger, senior technical manager for mortgage adviser John Charcol, said that the market has recently stabilised.

While acknowledging the problem of a lack of funding for lending, he stated: "There is no particular reason to expect any further sharp rises in the very short term." But he also warned that rates are not likely to return to earlier, lower levels. Mr Boulger was speaking after data from Moneyfacts showed that interest on two-year fixed deals increased on average by 0.16 per cent in a week.

At the same time, five-year mortgages rose by 0.21 per cent. Mr Boulger put this down to the rising cost of funds that lenders were facing as well as the fact that they wished to restrict lending. He suggested that anyone planning to take out a fixed-rate mortgage in the near future talk to a broker, as deals can appear on the market for a short time.

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