Are hybrid mortgage rates the best of both worlds?
As rates start to slowly creep up are hybrid mortgage rates the best of both worlds for mortgage holders?
Deals that track the BOE base rate for a period, switching to a fixed rate at a later date are becoming increasingly popular. It is predicted that the BOE base rate will eventually rise and although one can say exactly when, forecaster predict that an increase could happen in 2014.
Data has shown more borrowers are considering innovative new products such as hybrid trackers. With such deals the structure of the mortgage rates best suits those prepared to take some risk while the base rate remains low, switching to a fixed rate as the base rate begins to rise.
Rates changed on hybrid mortgage deals are generally capped which helps to protect borrowers from sharp market rises and such deals are considered a good option for first time property buyers.
The Woolwich Building Society has a 5 year hybrid, tracker to fixed mortgage deal. For an initial 2 year period the product tracks at 2.99 per cent above base rate swapping for the final 3 years to a fixed rate mortgage at 4.29 per cent. A 30 per cent deposit or equity is required to be approved for the deal and a £1,299 fee is charged.
The Chelsea Building Society offer a 2 year tracker rate 1.89 per cent above the base rate switching for the final 3 years to fixed rate deal at 3.89 per cent.
If you are looking to compare hybrid mortgage rates best buy deals contact Direct Direct. Let us search the UK mortgages market on your behalf to compare the most competitive rates on offer.
