The best mortgage deals are vanishing, so what next for rates?

Lenders best mortgage deals are rapidly disappearing. Over the last couple of months the lowest rates have all but vanished.

Lenders such as the Chelsea Building Society, who at one point offered one of the best mortgage deals for a 5 year fix, has now increased its rate by a massive 1%. It's previous highly competitive rate of 3.19% is now not looking quite so competitive at 4.19%.

So why are rates on the up and where will it all end?

Since the beginning of the credit crisis banks mortgage funding costs have gradually increased. UK lenders advise that right up to the end of the first quarter of this year, they managed to maintain their low rates. However to main their profits these costs are now having to be passed onto mortgage-holders.

Recently swap rates have fallen, and in reaction to this one or two lenders such as Barclay and Nationwide have fractionally reduced their fixed rates by around 0.2%. However these are just two out of many lenders and whether any more will follow suit and start a trend of falling rates is unknown.

With many lenders suffering dwindling profits it is more than likely any funding cost reductions will only benefit the banks, who may choose to shore up their profits rather than reduce home-owners mortgage rates.

The trend is currently for rising rates, therefore any one looking to purchase property or remortgage is advised to make a move soon to avoid missing out on any competitive deals currently on offer.

A wait and see attitude could cost you money in the long term.

For the best mortgage deals on offer throughout the UK contact Deal Direct.