Fixed-rate mortgages ‘can have sting in the tail’

Given the current climate of rising interest rates, fixed-rate deals are tempting more and more British consumers, but redemption fees can often run in to many thousands of pounds, according to MoneyExpert.com.

With millions of Britons already dealing with debt management difficulties, the price comparison firm suggests that financial problems could be made worse for consumer who sign up to a fixed-rate mortgage deal and later decide to exit the arrangement.

“The key thing is to make sure you read the small print when signing up to a fixed deal,” said Sean Gardner, MoneyExpert.com’s chief executive.

“Redemption charges fees vary enormously and will also depend on the term you agree to – lenders will be less happy if you leave a seven-year deal after 12 months than they will if you leave a two-year deal in your second year.”

The base rate of interest in the UK currently stands at a six-year high of 5.75 per cent following five increases in the last 12 months.