Latest news with #fixedrate
Daily Mail
29-07-2025
- Business
- Daily Mail
The bank accounts where you're LOSING money: Millions of us fall into this trap, reveals money guru SYLVIA MORRIS. These three High Street giants are the worst… you need to shift your savings NOW
I think savers have been too hasty to write off the newly improved Guaranteed Growth and Guaranteed Income Bonds from National Savings and Investments (NS&I). NS&I bucked the trend among savings providers last week and raised the rate on these one-year fixed rate products.
Yahoo
24-07-2025
- Business
- Yahoo
Mortgage Applications Rise Even as Key Rate Hits 4-Week High
Mortgage applications in the US increased last week even as the 30-year fixed rate on conforming loa
Yahoo
21-07-2025
- Business
- Yahoo
Fixed vs. variable student loan rates: Which is best?
Key takeaways Fixed-rate student loans are usually best if you're exhausting your federal loan eligibility or prefer predictable monthly payments. Variable-rate student loans have interest rates that change with the state of the market. Fixed rates are best for people who have longer loans and want monthly payment stability. Variable rates are best for people looking to get lower rates when markets improve and pay off loans relatively quickly. Student loans can come with either fixed or variable rates. Private student loans have both options, but federal student loans only have fixed rates. Each works best depending on the situation, such as the type of student loan you're taking out. Fixed-rate loans are usually the safest choice for many students since it's hard to predict which direction rates will go, but both rate types have their pros and cons. Fixed vs. variable rates: Pros and cons Fixed-rate loans come with an interest rate that remains the same throughout the life of the loan, meaning you'll have predictable monthly payments. By comparison, variable-rate student loans have an interest rate that fluctuates based on market conditions. >>Learn more: How to calculate student loan interest rate Picking a variable-rate student loan could be beneficial in some scenarios, but it's tricky because market conditions are unpredictable. If the Federal Reserve (Fed) changes its benchmark rate, it can influence rates for borrowers with variable student loans. When the Fed lowers its benchmark rate, lenders might lower their minimum advertised rates. On the other hand, when the Fed increases its benchmark rate, lenders might increase their interest rates. Although the Fed's decision to lower or raise its benchmark rate doesn't impact rates for existing borrowers with fixed-rate student loans, it could influence rates for new borrowers. The fixed rate for federal student loans is adjusted annually on July 1 based on market conditions, and private lenders often adjust their fixed rates based on the market environment. Keep in mind: Your rate can affect other areas, such as your budget, your student loan payment and how your payment relates to your future income. Fixed-rate student loans Fixed rates remain constant during the loan term, which means your monthly student loan payments will be predictable as you pay off your debt. The only way to change a fixed interest rate is by refinancing the loan. While fixed rates are typically higher than the lowest advertised variable rates, they provide stability because the payment won't change. You'll know exactly how much you'll pay monthly and how much interest you'll pay overall. Pros Interest rate will never change Monthly payments are consistent You'll know how much interest you'll pay Cons Generally higher starting rates No benefit if interest rates drop Note that all federal student loans come with fixed rates. Since federal loans come with benefits that private student loans don't offer, like access to income-driven repayment plans and student loan forgiveness programs, we recommend that you exhaust your federal student loan eligibility first before turning to private student loans to fill in any funding gaps. Upcoming changes to student loan repayment options With the passage of the One Big Beautiful Bill Act, a lot of changes are in store when it comes to repayment options. Student loans expert Andrew Pentis breaks it down for you. Learn more Variable-rate student loans Variable interest rates are tied to market conditions, so your student loan payment could increase or decrease based on an adjustment in your interest rate. Lenders typically tie the loan's variable rate to a benchmark rate, like the prime rate or the Secured Overnight Financing Rate (SOFR) index, plus a fixed margin. While you might start with a lower payment than you would with a fixed-rate loan, your interest rate – and monthly payment – could rise later on. Pros Typically lower starting rates Benefit from market changes (in some cases) Lower monthly payments if interest rates are low Cons Rate can rise over time Monthly payment can change Can be more difficult to budget for Fixed or variable rate: When to choose Fixed interest rates are good for borrowers who don't have a lot of wiggle room to account for an adjusting interest rate. Variable-rate student loans are a good option if you qualify for the lowest rates available. As mentioned earlier, all new federal student loans have fixed interest rates, and fixed rates are typically an option with private lenders. Private student loans tend to offer variable interest rate options as well. The idea that fixed-rate student loans are always better is a common misconception, according to Lawrence D. Sprung, certified financial planner and founder of Mitlin Financial and Wealth Advisor. In comparison, Tayne advises most student loan borrowers to choose a fixed-rate loan because payments are predictable and easier to manage with their budgets. While she acknowledges variable rates may be better if the student can qualify for a lower rate and pay off the loan within a few years, she notes that it's rarely the case for college students with little income or savings. Here are some scenarios where choosing a student loan with a fixed rate can make sense: Fixed rates are better Variable rates are better You prefer predictable monthly payments. You plan to pay off your student loan early. You want to lock in a low fixed rate. You have extra room in your budget in case rates rise. You're choosing a long repayment term. You can qualify for the best rates and terms. Student loan calculator Want to figure out some of the logistics of your student loans and experiment with some numbers? Bankrate wants to help you crunch the numbers. Calculate now What to consider before choosing When deciding whether a variable- or fixed-rate student loan is best for you, Sprung says to consider the terms of the loan, economic or interest rate outlook and your financial situation. In addition, here are some other things to consider. Consider the type of student loan: If you're taking out federal student loans, your only option is a fixed interest rate. In contrast, most private lenders offer both. Think about how long it'll take to pay off the loan: The longer your student loan, the more time a variable rate will have to fluctuate. That makes variable rates a better choice for parents or students who are not deferring payment. Look at market conditions: Take a look at current economic conditions and whether interest rates are rising or falling. For example, the Federal Reserve has been working to lower its interest rate, but markets are currently uncertain. Ask about variable terms: If you're considering a variable-rate loan, ask the lender how often the rate changes and whether there's a maximum rate cap. Think about your risk tolerance: Consider whether you'd be okay with short-term interest rate fluctuations or if you'd rather have the peace of mind of a fixed rate. Look at your credit score: Variable rates are best for those who can get the best rates and terms. If your credit score is lower, you may need student loans for bad credit, most of which have fixed APRs. Take your time to think about each of these factors and how they might impact you if you were to choose a variable- or a fixed-rate student loan. And remember that you can change your mind later and refinance your loans if you decide the other option is better for you. Student loan refinance calculator Want to see if refinancing is right for you? Bankrate's student loan refinance calculator is here to help. Calculate now How to switch student loan rate types Just because you choose one type of student loan doesn't mean you have to stick with it for the life of the loan. You can refinance your student loans, which means swapping out your current student loans with a new private student loan. Keep in mind that there's no guarantee that refinancing later might be difficult, depending on your financial situation. 'Depending on where rates go, your credit history and income will impact how easy [it is to refinance],' Sprung says. 1. Fixed rate to variable rate If you have a fixed-rate federal or private student loan, it's possible to refinance to a variable-rate private student loan. Doing so could be a smart move if you can save money. That said, think twice about refinancing federal student loans because it means you'll lose access to federal benefits, such as federal forbearance. 2. Variable rate to fixed rate You can also refinance from a variable-rate private student loan to a fixed-rate private loan. Making this choice could be a wise move if you prefer predictable monthly payments and can qualify for a lower fixed rate. Bottom line A fixed-rate student loan may be the best option if you prefer a longer repayment period and stable monthly payments throughout the life of the loan. Plus, it's your only option if you're exhausting your federal loan options first, which experts often recommend. If you intend to pay off your loan faster and need a private student loan to fill in funding gaps, a variable-rate loan could be a better fit for you. Whichever option you choose, compare rates and terms from as many lenders as possible to get the best deal. You may also have to check into student loans for bad credit. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Daily Mail
17-07-2025
- Business
- Daily Mail
Best mortgage rates edge down AGAIN as more lenders make cuts: How much lower will they go?
The cheapest fixed rate mortgages have edged lower once again thanks to another wave of rate cuts by lenders this week. Barclays, Santander, Halifax and Lloyds Bank are the latest to slash rates, taking the cheapest deals as low as 3.7 per cent. Santander and Halifax are offering two-year fixes at 3.79 per cent for those moving home with at least a 40 per cent deposit. However, Lloyds Bank goes one better than all the rest offering the chance to get a rate as low as 3.69 per cent on a two-year fix, with a £999 fee. The catch? Buyers will need to have a Club Lloyds bank account to get it. On a £200,000 mortgage being repaid over 25 years, it would mean paying £1,021 a month. In terms of five-year fixes, Lloyds Bank is offering 3.84 per cent to borrowers with a Club Lloyds account. For those who don't have Club Lloyds account, the bank is offering a 3.79 per cent two-year deal or a five-year fix at 3.94 per cent. From tomorrow Barclays will also get in on the action with a 3.79 per cent two-year fix and a five-year deal at 3.91 per cent, both with an £899 fee. Barclays has also undercut some of its competitors by launching a 3.75 per cent two-year fix for property purchases if they are a premier banking customer. For those buying or remortgaging with smaller deposits or equity, rates are not that much higher. For example, someone remortgaging with 25 per cent equity in their home can now bag a 3.94 per cent two-year fix with TSB or a 3.96 per cent five-year fix with Santander. And someone buying with a 15 per cent deposit can get a 4.04 per cent two-year fix with Santander with just a £749 fee. On a £200,000 mortgage being repaid over 25 years, that would equate to paying £1,061 a month. Will mortgage rates fall further? Inflation is one the most important metrics that people should keen an eye on as that will have a major impact on the future direction of interest rates. The Bank of England sets interest rates to try to keep consumer prices inflation at the Bank and Government's 2 per cent target. At present, inflation is above that target. It rose to 3.6 per cent in the 12 months to June, rising from from 3.4 per cent in the 12 months to May. However, the Bank of England will also closely monitor other aspects of the economy and take that into account when making its rate decisions. The UK economy contracted in May by 0.1 per cent and the jobless rate rose to 4.7 per cent. Payrolls in the private sector contracted for the thirteenth straight month. If inflation is deemed the biggest threat, then the Bank of England is more likely to The theory is that raising interest rates lifts the cost of borrowing for individuals and businesses and thus reduces demand for it, slowing the flow of new money into the economy and applying the brakes. In contrast, cutting interest rates lowers the cost of mortgage rates and other borrowing and increases demand, pushing the accelerator on the economy. Mortgage broker Aaron Strutt of Trinity Financial thinks there is still room for rates to fall a little from here. 'Mortgage lenders are still cutting their rates despite the higher inflation figures,' said Strutt. 'Even with everything that's going on with the economy and global affairs it still seems like rates are heading down. 'I would not bet against rates being closer to 3.5 per cent over the coming months, but as we have seen so many times before almost anything can happen. 'If you get the chance to take a rate anywhere near 3.75 per cent you are doing very well.' What about for households remortgaging? An estimated 900,000 borrowers will reach the end of their mortgage deal during the second half of this year, according to UK Finance, the trade association for the banking and finance industry. Many households will be coming off rates between 1 and 2 per cent, locked in prior to interest rates rocketing upwards in 2022 and 2023. While they face far higher rates today, the blow will somewhat be softened by recent cuts. Currently the lowest remortgage rates for someone fixing for five years are with Barclays and HSBC, both offering deals at 3.86 per cent. Those prepared to fix for two-years can do slightly better with HSBC offering a 3.83 per cent deal. How to find a new mortgage Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible. Buy-to-let landlords should also act as soon as they can. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you What if I need to remortgage? Borrowers should compare rates, speak to a mortgage broker and be prepared to act. Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it. Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees. Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone. What if I am buying a home? Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power. What about buy-to-let landlords Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages. This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too. How to compare mortgage costs The best way to compare mortgage costs and find the right deal for you is to speak to a broker. This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice. Interested in seeing today's best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs. If you're ready to find your next mortgage, why not use L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you. > Find your best mortgage deal with This is Money and L&C Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
Times
15-07-2025
- Business
- Times
How 300,000 homeowners could end their mortgage nightmare
As many as 300,000 homeowners who took out expensive five-year fixes when mortgage rates peaked two years ago could finally save money by getting out of their expensive deals — even if they have to pay a hefty exit fee. The estate agency Hamptons said that homeowners with at least 40 per cent equity who took out a fixed rate mortgage at 5.25 per cent or more two years ago — or 5.79 per cent if they were a first-time buyer with a 10 per cent deposit — could save enough by switching deals to make it worth paying an early repayment charge and any new mortgage fees. Mortgage rates have soared over the past four years, from historic lows of less than 1 per cent in late 2021, just before the Bank of England began increasing its base rate of interest from an all-time low of 0.1 per cent in December 2021. Bank rate then rose 14 times to reach 5.25 per cent in August 2023 before falling more slowly to hit 4.25 per cent in May. Mortgage rates had been rising but then surged in the aftermath of the Liz Truss mini-budget in September 2022 and went even higher the following summer because of worries over persistently high inflation. The average five-year fix at 60 per cent loan-to-value (LTV) — peaked at 5.74 per cent and the average two-year fix peaked at 6.22 per cent, according to the Bank of England. Rates have not returned to their previous lows. The average five-year fix at 60 per cent LTV last month was 4.15 per cent and the lowest rate now is 3.87 per cent from Santander. But they have fallen enough for it to make it cheaper for some homeowners who are a few years into an expensive fix to save by exiting early. Early repayment charges are paid as a percentage of the outstanding loan. They sometimes remain the same throughout a loan's fixed term but typically reduce with the term. For example, the charge can be 5 per cent in the first year of a five-year fix, then fall each year to 1 per cent in the final year. The charges can be paid upfront or added to the new mortgage, where they will incur interest over the loan's lifetime. Repayments on the average 5.74 per cent five-year fix two years ago would be £1,257 a month on a £200,000 25-year mortgage. By now a homeowner would have reduced their loan to £192,378. To get out of that deal after two years would cost £5,771, assuming that the loan had a 3 per cent fee. • Mortgage rule changes could help 16,000 first-time buyers a year If you were able to get the lowest rate on the market of 3.87 per cent, repayments would be £1,054 a month on a 23-year loan. That's £203 a month less than sticking with the old deal, a £7,308 saving over the three years that were left on the old deal. This would outweigh the exit fee and the £999 fee for the new mortgage, and leave you £538 better off. Aneisha Beveridge from Hamptons said: 'Historically, hefty early repayment charges have meant that it's rarely made financial sense for borrowers to exit their mortgage deals ahead of schedule. But the sharp spike in mortgage rates a couple of years ago, followed by their recent descent and the return of sub-4 per cent deals, has created a window of opportunity.' Hamptons' analysis suggests that those who fixed between July and September 2023 would, on average, be better off paying the fee. There were 108,380 five-year fixes taken out in those three months, according to the trade association UK Finance. Five-year fixes made up about 47 per cent of all new deals in that time. This does not include product transfers, where a customer takes a new deal with their existing lender. UK Finance does not provide data on the length of product transfers, only how many there were, but if the same proportion of product transfers were taken on five-year terms, it would increase the total number of five-year fixes taken out in those three months to 295,880. Beveridge said: 'There's now a significant group of homeowners who locked into five-year fixes in the summer of 2023 who could save money by remortgaging, even after factoring in those exit fees. This is even though rates remain higher than the ultra-low levels we saw in the decade before 2022.' • Got an interest-only mortgage? You're truly middle class A mortgage broker will usually not recommend paying an early repayment charge unless all the maths, including fees, is in your favour. This means it can be hard to get advice on situations such as what happened in 2022, when rates were rising and homeowners who had years left to run on cheap deals were wondering if they should pay to get out early to avoid a much bigger shock when they eventually came to remortgage. Chris Sykes from the mortgage broker MSP Financial Solutions said: 'You also need to consider things like fees that you paid to set up the mortgage — solicitor, lender, broker or valuation fees. Are you paying them all again to refinance now? The maths isn't as simple as 'we can save 1.1 percentage points for the next two years and we can pay a 2 per cent exit fee to do that, so it makes sense'. 'I think it could be good advice to break a product if the maths stacks up to, you just have to be careful how you do your maths.' Have you paid an exit fee to get out of an expensive mortgage deal? Let us know in the comments
