Take out a cheap fix or tracker now, before it's too late

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The Independent Online

Mortgage borrowers are being warned to be quicker off the mark in securing good deals.

Melanie Bien, director at broker Savills Private Finance, says that despite an interest-rate reduction in December, and further cuts expected soon following last week's turbulence in global stock markets, lenders continue to raise the price for new tracker mortgages.

"Nationwide and Alliance & Leicester both increased rates last week, while Woolwich raised its tracker rates the week before," she said. "So fixes are looking far more attractive, even though at least one and potentially two further quarter-point reductions in the base rate are expected this year."

The big problem, she warns, is that the really good deals aren't hanging around for long. "Bristol & West launched an excellent range of two-, three- and five-year fixed-rate deals last week but pulled them just days later as they were inundated with business."

But there are still bargains around. "First Direct has just launched a two-year fix at 4.75 per cent with a £1,498 fee, which is much cheaper than the best tracker on the market [Nationwide's 5.53 per cent – 0.03 per cent over base for two years – with a £1,499 fee].

"Even with two base rate reductions, you would still be better off with First Direct," Ms Bien added.

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