Seven years of low interest rates throws focus on mortgages
The Bank of England has kept rates at 0.5 per cent for seven years now, but borrowers who think they're on a great low deal should think again. Complacency could mean them missing out on even better deals, with two year fixed rates on offer at less than 1.5 per cent now.
In fact things are even looking up, according to Mark Harris at SPF Private Clients who expects lenders to introduce five-year fixed-rate deals at less than 2 per cent to reflect existing cheap swap rates and the fact that interest rates aren’t rising yet.
He reckons now is a good time to fix your mortgage. “If you can’t afford to be wrong – that is, if rates rose, you would struggle to pay the mortgage – then a fixed rate makes sense,” he explained. “Anyone who secures one of these rates won’t be disappointed when they look back in years to come.”
A better bank account? You bet
Remaining loyal to your bank will cost you money. But taking a little time to find a more appropriate current account will put more cash in your pocket. If you regularly go into the red, for instance, have a look at First Direct where the first £250 you go into overdraft is interest free.
If you want interest on credit balances or reward for their custom, there's Halifax Reward or TSB Classic Plus for balances of £2,000 or less or Santander's 123 account, which also pays cashback on utility bill payments.
Paltry £32 energy cut annoys
Npower is the latest big six energy giant to reveal a £32 cut to standard tariffs. It’s reducing average gas prices by 5.2 per cent, but not until 28 March, giving it six more weeks to earn extra profits while customers pay top whack for heating their home during the winter weeks.
The move follows similar cuts announced by SSE, Scottish Power and E.on last month, and British Gas last year, leaving EDF as the only one of the big six not to have reduced gas prices for customers against a background of a 23 per cent fall in wholesale prices last year.
But if you're one of the two-thirds of households that hasn't ever switched supplier, you could save £300 at a stroke.
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