Many banks and building societies are reporting huge demand for fixed rate mortgages following recent interest rate increases. Yorkshire Building Society reported sales of their 5.59% five year fixed deal as high as have Woolwich with their fixed rates sales double what they were this time last year.
Our view
It is hardly surprising that people are looking to lock in their rate. However, we would suggest that if you did not lock in to a fixed rate deal some 6 months ago you may have "missed the boat".
Fixed rate deals, in our opinion, are looking on the expensive side now in the medium to longer term i.e. 5 year plus. We expect interest rates to rise a few more times but to start to come back down next summer.
You should consider very carefully before locking into deals that are more than three years.