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FTBs fall foul of fixies

Jaimie Kanwar

Homeowners refinancing their mortgages are in for a rude awakening as they face the highest fixed-rates deals since the start of the decade...

According to figures compiled by MoneyFacts, the average rate for a two-year loan has hit 6.64% - up from just 4.34% two years ago, which  means that someone coming to the end of a mortgage on a £150,000 house they took out in 2005, will see their average repayments jump by £206 a month to £1,025.

MoneyFacts' figures show that someone taking a typical five-year deal in 2003 on a £250,000 home loan will have to stump up almost £500 more when it comes to their new deal. Typical fixed rates are the highest since 2000.

A spokesperson for MoneyFacts commented: “The new research will come as bad news for first-time buyers, as well as existing homeowners. Not only are they facing greater repayment costs, but they are also now expected to put down a greater deposit to be approved a mortgage”.

It is estimated that around 1.4 million homeowners will see their fixed deals expire this year.