Mortgage rate rise looks likely.

A mortgage rate rise is looking increasingly likely in 2012 due to concerns over a second UK recession and mounting eurozone problems.

While many lenders have recently been more competitive, fewer mortgage approvals were granted in December than economists predicted. Figures show that consumer credit fell dropped significantly because of economic uncertainty created by the eurozone crisis.

The lending trend for cheap mortgage products could be turning around. The BOE finance stability report reveals mortgage lending has been dropping in profitability since 2009 and now mortgage rates simply do not reflect rising wholesale funding costs.

The report suggests that during 2012 lenders may need to make a significant mortgage rate rise to cover their increased funding costs.

However the BOE report also advises that as some banks have managed to reduce their reliance on wholesale funding markets, some lenders may even be able to wait and see to what will happen in the market before introducing any significant mortgage rate increases.

In light of the BOE report, experts still believe that the lowest point in the current interest rate cycle is now passed and they continue to advise now is a good time for borrowers to lock themselves into a rate.

When looking for a new deal home-owners are being advised to look for longer term deals, as those borrowers who don't may face searching for new deal right at the time lenders decide to bring in a mortgage rate rise.

Deal Direct can help you get the best fixed rate mortgage deal available in the UK today.

Fill in our enquiry form opposite or telephone 0800 048 8828.