subject: UK Mortgage Rates analysis [print this page] UK Mortgage Rates analysis UK Mortgage Rates analysis
The banking system of UK has taken a huge hit owing to the recent global economic meltdown. The UK Mortgage Rates have been greatly affected by the global crisis. Many banks are facing a severe credit crunch and some are near bankruptcy. These events have put people who are paying mortgages at a risk. Owing to the fragility of the market it is very important for homeowners to keep tabs on the UK Mortgage Rates. There are some unique sites on the internet which provide up to date information on the UK Mortgage Rates available to borrowers. Information on such sites is put down by some of the leading mortgage brokers in the industry. According to recent consumer price index the inflation rate in UK has touched 5.2%. This is all the more reason why people need to carefully watch the mortgage rates in the market. This information is not easily available and needs to be given by the experts. Those who are not careful might end up facing foreclosure of their mortgages and repossession of their homes. The best way to survive the after effects of recession is to follow the advice of an expert.
Before taking a mortgage it is very important to know and understand the various kinds of UK Mortgage Rates. Mortgage rates are usually of two types. The first type is the Fixed Rates of mortgage and the next one is the Variable Rates of mortgage. The fixed rate of interest means that the interest rate is fixed over the entire term of the mortgage period. In this kind of mortgage a percentage of the total principal amount is fixed and it remains fixed for the complete term of the mortgage. This kind of mortgage is usually taken on a long term which can range from tenure of five years to fifteen years. Banks which offer this kind of mortgage charge a higher rate of interest in order to make up for the inflation costs over the tenure of the mortgage. The best thing about such a mortgage is that changes in the economy will not affect the Fixed Rates. So any kind of economic crisis will not have an effect on the borrower. This kind of mortgage holds good for people who are on a regular job with a fixed salary. The draw back in this kind of mortgage is that, if for any reason the borrower loses his or her job or goes out of fixed salary bracket, he or she will be in a soup. Individuals in such situations will find it very difficult to cope up with the EMI's as they are quite high.
The other kind of UK Mortgage Rates is the Variable Rates of interest. As the name suggests in this kind of mortgage the interest varies with fluctuations in market. The Variable Rates of interest will increase with the increase in inflation. The interest rate might also come down and reduce the EMI amount. People who opt for such UK Mortgage Rates must keep an eye on the market. Since keeping an eye on the market is time is a complicated affair, it should be left to an expert.
