Borrowers have been advised to lock into fixed-rate mortgages sooner rather than later.
Homeowners should take advantage of cheap fixed-rate mortgages before the current trend for reductions from lenders comes to an end, according to advice from John Charcol.
The mortgage broker suggested that recent events in the bond markets will lead to the end of recent fixed-rate reductions.
The quantitative easing (QE) plan to pump more money back into the UK economy saw a drop in gilt yield maturities earlier in the month with falls also recorded in swap rates. This has an impact on bank lending, with mortgage finance often linked to gilt yields.
However prices have risen this week following a number of significant events including Bank of England governor Mervyn King's publicly-expressed concerns over the state of the public finances and the unexpected announcement that inflation had risen.
"Swap rates have in general gone back up to their level prior to the QE announcement and some shorter dated swaps are actually now a little higher," a statement from John Charcoal explained. "This is bad news for fixed-rate mortgage pricing and hence my expectation that we will see some lenders start to re-price upwards as early as next week."
The mortgage experts added that "now looks like a good time" to lock into a fixed-rate mortgage "ideally for at least five years", suggesting that a few new deals are expected later this week.
