Fixed two-year deals reach a ‘record’ low

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Fixed two-year mortgage deals have reached a ‘record’ low of 3.82 per cent on average, MoneySupermarket said.

Leeds Building Society this week launched its lowest ever two-year fixed-rate mortgage with a rate of 1.99 per cent.

This brings the average two-year fixed rate to 3.82 per cent, down from 4.01 per cent in August, the comparison website said.

But the website, whose records began in 2007, urged borrowers to consider all the fees and charges in order to snap up the best deal.

MoneySupermarket found that fixed-rate mortgage fees have generally risen by 6.4 per cent since June, making it harder for borrowers to compare the true costs.

It said a product with a slightly higher rate but lower set-up costs may work out cheaper, depending on how much you need to borrow.

Figures released last week showed that the number of mortgage approvals for house purchases climbed to a 20-month high in August, as borrowers took advantage of the raft of rate cuts.

Mortgage approvals for house purchases increased nearly 6 per cent to 52,410 last month, the Bank of England said, while remortgages surged nearly 10 per cent to 34,688.

A number of lenders – such as Nationwide and the Post Office – have slashed rates on a range of fixed-rate mortgages as the Bank of England holds its base rate at an historic low of 0.5 per cent.

n More than half of households are “scrimping” to pay bills, an increase of more than a million homes in a year, Legal & General said.

Around 11.5 million homes are budgeting on a fine balance between managing to meet their outgoings and sinking into debt, its MoneyMood survey said.

This marks a rise of 1,050,000 households in danger of debt compared with 2010.

In September 2007 six out of 10 homes had some cash to cover expenses after forking out for bills and debts.

But by the end of last month that had fallen to 45 per cent of households, according to the poll of around 1,000 adults in Brit- ain.

The North West appears to be having the toughest time, with 62 per cent finding it hard meeting expenses.

This figure stands at 59 per cent for the North East and the West Midlands and 57 per cent for Wales and Scotland.

Households are best able to meet costs in Yorkshire and the Humber and East Anglia, the data suggests, but 48 per cent still say they are struggling.

Just over half (52 per cent) of households in London are having trouble covering their bills.