Fixed-rate loans still look good: Shop around for competitive mortgages

HOMEOWNERS who missed the boat when they tried to move into long-term, fixed-rate loans last week are less enthusiastic about the slightly higher rates now on offer, writes Vivien Goldsmith.

Walter Avrili, operations director of the mortgage broker John Charcol, said: 'I'm not sure whether it's a storm in a tea cup. But for a quarter of a per cent it's not worth waiting. These rates are still ridiculously low. People would have bitten your hand off a few years ago for rates like this. Anything below 8 per cent must be a good bet.'

John Charcol has five-year funds at 6.99 per cent with no compulsory insurances. Woolwich Building Society withdrew its 6.95 per cent rate last week and has replaced it with one at 7.65 per cent. But its three- year rate, launched last week at 7.25 per cent, has been cut to 7.1 per cent. The 200 people who applied last week will get the new lower rate. This will save someone with a pounds 60,000 loan pounds 6.26 a month bringing the monthly payments down to pounds 310.75. There is a three-month redemption penalty and a pounds 250 fee.

First Mortgage Securities has a three-year fix at 5.75 per cent with no fee, no compulsory insurance and no redemption fees. Stroud & Swindon Building Society has a five-year fix at 7.19 per cent to replace its 6.69 per cent five-year fix.

David Findlay, mortgage advances manager, said the society did half a month's business in two days last week. 'We have priced the new five-year fix to mop up as much business from our previous rate as we could.'

National & Provincial has a five- year fix at 7.2 per cent for loans up to 75 per cent, and at 7.45 per cent for loans up to 95 per cent. Halifax still has a five-year fix at 7.25 per cent.

Rates in the money market eased slightly this week. The five-year benchmark moved up to 7.06 per cent at one point, but has now eased back to 6.89 per cent.