Seek the best deals through fixed rate mortgages.

Householders looking to manage their bills next year are advised to seek the best deals through fixed rate mortgages.
With the continued uncertainty surrounding the Eurozone, financial experts are warning that mortgage interest rates could rise next year as the cost of inter-bank lending increases.
In recent months the Bank of England’s base rate has kept mortgage rates comparatively low, however that is set to change as the Libor, the rate at which banks lend to each other, reaches a two-year high.
The widening gap between the two rates is an indicator that banks are becoming less confident lending to each other and are more likely to restrict lending or impose tighter restrictions on borrowers. This is likely to lead to a rise in mortgage interest rates.
Fixed rate mortgages offers householders peace of mind as the amount they pay each month is fixed, no matter what happens to the interest rate. The best deals can be found by fixing your mortgage rate over five or even ten years, however this does mean customers could miss out if interest rates fall again.
Householders with tracker mortgages are already starting to see interest rates rise by 0.5%, a sign of things to come. If interest rates rise by as little as 1%, a typical householder with a £140,000 mortgage will have to pay an extra £1,000 per year for their mortgage.
The current economic climate is also changing the way banks are lending to householders, with lenders imposing tighter restrictions and expecting a higher deposit to be put up front. People with poor credit history may be overlooked in favour of buyers with higher deposits or with a better track record.
People looking to buy their own home or remortgage their existing property are advised to act now to fix their mortgages to avoid the uncertainty of fluctuating interest rates in 2012.