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Speculation has been mounting that further interest rate cuts will be announced by the Bank of England, after minutes from its previous meeting on cuts were released. They reveal that the Bank's n...
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Wednesday 1st August 2007
Discounted mortgages may now be a cheaper option than fixed rate, new research from Mform shows.
The average annual cost of a two-year discounted mortgage, including fees, is around £1,700 pounds lower than a two-year fixed rate deal - a saving of around £70 a month.
Many borrowers have been choosing fixed rate mortgages, bearing in mind the recent interest rate rises, in an effort to keep the cost of their mortgage repayments low, but this could be a mistake.
Francis Ghiloni, marketing and business development director at Mform said: "Recently mortgage customers have understandably gone for certainty in the face of rate rises and that has meant fixed-rates have dominated the market.
"In July we have seen the trend reversed when customers have seen the true costs involved.
"People who simply look at fixed-rates to the exclusion of everything else are missing out on potentially good deals.
"The fixation with fixed-rates is not necessarily healthy."
Discount mortgages offer good value and will also benefit borrowers if rates do start to come down.
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