Money Insider: Have fixed mortgages bottomed out?

During the last two months, we've seen the cost of fixed-rate mortgages fall to an all time low, with some jaw-dropping deals on offer.

The sharp decline in mortgage pricing mirrors the trend seen in the money markets, with swap rates for money falling from 3.24 per cent in February to just 1.84 per cent last week.

Even though we've never seen mortgages cheaper than they are now, there will still be some people delaying their decision to switch in the hope that rates will fall even further.

It is human nature to always want to get the very best deal you can, but if you hold out too long there is always the risk that the tide will turn and before you know it, rates are on the rise again.

Historically any five-year fixed-rate mortgage with a rate below 5 per cent was considered a good deal, so to see rates as low as 3.49 per cent for five years and 3.99 per cent for a 10-year term is quite remarkable.

There has been an abundance of economic bad news during the last couple of months, with the eurozone hobbling from one crisis to the next, America losing its AAA rating, extreme volatility in the stock markets and our own economy growing at just 0.2 per cent for the second quarter of 2011. It's hard to believe things can get much worse, but there are other factors which could spell the end of this period of ultra low fixed mortgage rates.

In just over a week from now the Independent Commission on Banking (ICB) is due to publish its final plans for increasing stability and competition in the UK banking sector.

As part of these reforms, there is growing expectation that the ICB will recommend to the Chancellor that the investment banking and retail banking functions of our high street banks are separated or "ring-fenced".

If this recommendation is forthcoming and subsequently implemented by George Osborne, the significant cost implications for the UK banking sector could result in consumers having to pay more for their borrowing, including mortgages.

So if you like the look of some of the latest mortgage deals but are waiting for rates to drop another 0.25 per cent, you may find they never quite reach that level.

Instead, why not look at how low your monthly repayments will be if you lock in now, and remember that this is the amount you'll be paying for the next five or 10 years depending on your choice of term.

The current best buys include a three-year fix from Coventry Building Society at 2.99 per cent with £999 fee, a five-year deal from Yorkshire Building Society at 3.69 per cent with £95 fee and 10 year-fixed at 3.99 per cent and £1495 fee from Chelsea Building Society.

How low will rates go is always the 64 million dollar question, but if your monthly budget is fairly tight and you're not comfortable with a variable rate product, then it may be sensible to consider locking in now rather than waiting for a lower rate that never materialises.

Choosing the cheapest finance for your new car

With the 61-plate registration cars hitting the forecourts, there will be many people looking at the finance options available as they trade their vehicle in for a newer model.

There are some really attractive personal loan deals to be had, particularly as lenders have been trimming rates for larger sums.

For example if you are looking to borrow £7,500 over five years the top loans are from M&S Money at 6.4 per cent APR, costing £145.76 per month or Nationwide BS at 6.6 per cent APR costing £146.42 per month. If you are an existing Nationwide current account customer, there is a preferential rate of 6.3 per cent APR.

Many car retailers will offer their own finance, so if you're checking to compare whether it is cheaper than the banks, ask for the total cost of credit (including all fees) to enable you to make a true comparison.

If it is a smaller sum you're after, some garages may allow you to buy your vehicle via credit card, although not all car retailers will offer this option.

The best 0 per cent credit cards for buys are M&S Money and Tesco Clubcard – both 0 per cent for 15 months so you could benefit from interest-free car repayments during this time and then switch the remaining balance to a loan when the 0 per cent deal ends.

Alternatively, you could pay on a credit card and then arrange to switch your balance to a 0 per cent balance transfer – with up to 22 months currently available from Barclaycard Platinum.

Whichever type of finance you opt for, you'll need a near A1 credit record to be accepted, especially if you're after the best buy deals.

More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete tomorrow
Piers Morgan tells Scots they might not have to suffer living on the same island as him if they vote ‘No’ to Scottish Independence
peopleBroadcaster has a new role bringing 'the big stories that matter' to US
Arts and Entertainment
Kylie performs during her Kiss Me Once tour
musicReview: 26 years on from her first single, the pop princess tries just a bit too hard at London's O2
Life and Style
Moves to regulate e-cigarettes and similar products as medicines come amid increasing evidence of their effectiveness
healthHuge anti-smoking campaign kicks off on Wednesday
Life and Style
fashionEveryone, apparently
The erotic novel Fifty Shades of Grey has already been blamed for a rise in the number of callouts to the fire brigade for people trapped in handcuffs
voicesJustine Elyot: Since Fifty Shades there's no need to be secretive about it — everyone's at it
Arts and Entertainment
A new Banksy entitled 'Art Buff' has appeared in Folkestone, Kent
Arts and Entertainment
Shia LaBeouf is one of Brad Pitt's favourite actors in the world ever, apparently
filmsAn 'eccentric' choice, certainly
Life and Style
An Internet security expert has warned that voice recognition technology needs to be more secure
techExperts warn hackers could control our homes or spend our money simply by speaking
peopleBenjamin Netanyahu trolled by group promoting two-state solution
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    Day In a Page

    Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

    Isis an hour away from Baghdad -

    and with no sign of Iraq army being able to make a successful counter-attack
    Turner Prize 2014 is frustratingly timid

    Turner Prize 2014 is frustratingly timid

    The exhibition nods to rich and potentially brilliant ideas, but steps back
    Last chance to see: Half the world’s animals have disappeared over the last 40 years

    Last chance to see...

    The Earth’s animal wildlife population has halved in 40 years
    So here's why teenagers are always grumpy - and it's not what you think

    Truth behind teens' grumpiness

    Early school hours mess with their biological clocks
    Why can no one stop hackers putting celebrities' private photos online?

    Hacked photos: the third wave

    Why can no one stop hackers putting celebrities' private photos online?
    Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

    Homegrown ballerina is on the rise

    Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
    Education, eduction, education? Our growing fascination with what really goes on in school

    Education, education, education

    TV documentaries filmed in classrooms are now a genre in their own right
    It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

    It’s perfectly reasonable to negotiate with villains like Isis

    So why don’t we do it and save some lives?
    This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

    Is a sub-2-hour race now within sight?

    Dennis Kimetto breaks marathon record
    We shall not be moved, say Stratford's single parents fighting eviction

    Inside the E15 'occupation'

    We shall not be moved, say Stratford single parents
    Air strikes alone will fail to stop Isis

    Air strikes alone will fail to stop Isis

    Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
    Nadhim Zahawi: From a refugee on welfare to the heart of No 10

    Nadhim Zahawi: From a refugee on welfare to the heart of No 10

    The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
    Witches: A history of misogyny

    Witches: A history of misogyny

    The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
    Shona Rhimes interview: Meet the most powerful woman in US television

    Meet the most powerful woman in US television

    Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
    'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

    Endangered communities photographed 'like Kate Moss'

    Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style