Fixed Rate Loans Too Expensive

Many borrowers with home owner loans and people obtaining a new loan have had to decide which loan type is better in a highly volatile financial environment.

Despite the fact that a regular fixed rate loan is much pricier from the start, it can provide the borrower with a back-up against soaring interest rates.

Still, a recent study has revealed that fixed rate home owner loans are currently the most expensive because the swap rates have seen a drastic increase over the course of the last few months.

According to the figures provided by Moneyfacts, at the end of November, the swap rate constituted just 1.35%, whereas this week it has been pushed up to 1.98%, thus increasing the cost of a fixed rate loan or mortgage because most lenders have already increased their interest rates.

Since the increase in the base rate of interest is bound to be brought about sooner or later, lenders are now trying to protect themselves by making their fixed rate loan deals more expensive.

As a result, a tracker rate home owner loan seems to be the best option at the moment. If there is an increase in interest rates by 0.5% now, most of these products will still be a more competitive loan option than a similar fixed rate deal.


The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

When we put efforts into our work and get paid for this, we get an amazing feeling of satisfaction. Our hard hard work seems to have been remunerated financially. We go shopping and buy the items we need and the items we simply want.