Plenty of people are sticking to SVR mortgages because they look low compared tofixed-rate mortgage, especially tracker mortgages that are tied to the current Bank of England rate of  0.5 percent. In the opinion of Nationwide, borrowers like the current variable rate mortgages which on average are currently about 1.5 percent lower than fixed-rate mortgages. Lenders are however beginning to cut rates on fixed rates to cater to borrowers who are nervous about the weakness of the pound sterling and the massive debt built up by the UK.

Martijn van der Heijden, head of mortgages at HSBC, comments: “Mortgage rates are difficult to predict over the next few years, and volatility may be unavoidable. Borrowers who can’t absorb an increase of up to 3% on their rate should seriously look to fix payments.”HSBC fixed rate mortgages range from two years at 3.69%, to five years at 5.29%.

Chelsea BS has introduced new fixes: 4.69% for five years to a maximum 75% LTV, or 5.04% for an 80% LTV.Andrew Paddock, Chelsea BS mortgage product development manager, says: “With so much speculation about future levels of inflation and mortgage rates, people welcome an opportunity to fix payments at a competitive rate for five years.”

 Ray Boulger of brokers Charcol, says: “It is probably still right to stay on a tracker, but turbulence on the foreign exchange markets shows clearly where risks to our economy lie, and that risk is partly political.“For some weeks, we will be susceptible to opinion polls, and Greece shows how markets get the bit between their teeth if they decide a country is in difficulty.Our difficulties are less severe than Greece, but for a hung Parliament or a Labour win – which could mean Mr Brown staying as Prime Minister and possibly not Mr Darling as Chancellor – a long-term fix of five years has attractions. You can get them under 5%, with a reasonable amount of equity."

News brought to you by Mortgage ComparisonSpecialists The Mortgage Finders