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Borrowers warned not to rush in wake of interest rate hike

Leading mortgage lenders have warned against the temptation of fixed rate deals, in the wake of the Bank of England's interest rate rises.

Those seeking bad credit mortgages or lifetime mortgages might opt for a deal where interest rates were guaranteed to remain the same over time. This is as opposed to a tracker mortgage, which would correspond to changes in base rate as governed by the Bank of England.

Interest rates went up to 4.75 per cent last Thursday, but Ray Boulger, spokesman for independent mortgage provider Charcoal, told Reuters that this it was not necessarily a good idea to go for a fixed rate loan: "If base rates are going to go above five percent and stick there for a while, then it makes sense to take a fixed mortgage.

"But if it is not going to go over five percent, and I don't think it will, then a tracker mortgage makes far more sense," he continued.

At this rate, we'll be poor

FACED with an almost certain interest rate rise on Tuesday and reeling from high petrol prices, struggling families have been told they can meet the squeeze with some simple cost-saving measures.

"If you are nervous about rising interest rates, lock in your loan now," leading financial adviser Noel Whittaker said.

"If you're already stretched don't worry, you can get some peace of mind by switching to fixed for two, three or five years and know your rates won't rise in that time."

Fixed rates are available from 7.19 per cent for two years to 7.35 per cent for five years.

"This is attractive because it's below the current 7.57 variable rate, but get financial advice before you make any switch," Mr Whittaker said.

Graduates putting off house purchases

Thomas Charles ( www.thomascharles.com), the leading debt solutions consultancy, today revealed the results of a survey amongst graduates to establish the impact of their levels of debt on their ability to buy a property. In conjunction with the UK's No 1 student accommodation website, Accommodation for Students(www.accommodationforstudents.com), the company surveyed 950 people across the UK who have graduated since 2001. 85% are under 30 and 65% are aged between 23 and 28, a prime age range for young professionals wishing to buy their first property.

The survey suggests that the current levels of unsecured debt amongst graduates is having a major impact on the property market with fewer graduates being able to afford to buy a property and having to postpone getting on the property ladder by several years.

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