Rise in Inflation - Detrimental Impact on Availability of Fixed-rate mortgages

24-Jan-2011 Rise in Inflation - Detrimental Impact on Availability of Fixed-rate mortgages This month’s increase in inflation up-to 3.7% sees the rate of inflation at its highest since April 2010. This is essentially due to the increasing costs of both food and oil. As a result, the Bank of England is under severe pressure to combat the rise in inflation by raising the base rate for interest.

Unfortunately, this is having a negative impact on the types of mortgages that lenders are willing to provide their customers. This is demonstrated by the market already seeing certain lenders, for example, First Direct and Skipton and Newcastle Building Societies, removing fixed-rate mortgages from the product range made available to customers.

Consequently, mortgage repayments will increase. Statistics show that if the Bank of England were to increase the base rate by 0.5 per cent, the average mortgage repayment would increase by £41 per month. This may be a good time therefore to review and seek advice from your mortgage advisor in anticipation of the inevitable changes in this

For more information contact Duncan McGregor

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