That said, though, longer-term deals such as 10-year fixed rates have so far remained a niche product, not just because they offer slightly higher rates, but as they usually charge a penalty if they are paid off before the end of the fixed rate period.
Whether interest rates increase in November or are held at 0.25 per cent, predictions that they will go up serve as a valuable reminder that homeowners should be prepared for the prospect of steeper payments.
The fact many lenders have opted to increase their fixed rates ahead of November’s MPC meeting shows mortgage costs can rise even when there has not yet been any upward movement in rates.
Mark Carney has consistently suggested that any increases in rates will be “limited” and “gradual”, so there is no need for homeowners to panic that base rate is about to sky rocket.
However, it is vital for them to ensure they are on the best possible deal, and brokers will play an important role in helping them achieve this. For those who would struggle financially if their mortgage payments were to increase over time, locking into a fixed rate deal sooner rather than later could well be the best option.
The good news is that even though many lenders have re-priced their fixed rates in recent weeks, there is no shortage of competitive mortgage deals available. The question is how long they can last.
David Hollingworth is associate director communications of L&C Mortgages
