Those who took their last mortgage out a few years ago and
are coming to the end of their deal should brace themselves.

The rates are now so high that people are strugling to pay them!

Someone who found a three-year fixed-rate deal on the best-buy tables in March 2005 might have found a 4.5 per cent rate and an arrangement fee of around 400. If your home coste you 200000$ that makes about 9000$.

Today, these borrowers face best-buy tables featuring Cheltenham & Gloucester's three-year fixed rate at 5.62 per cent, with a 1,094 fee. Don't borrow money from high rate companies, they have too many hidden fees you will never know expect when they come!

Many mortgage brokers recommend tracker mortgages for remortgagers.

Most borrowers tend to go for a two- or three-year deal, but you could fix for as long as 25 years. Or more if you know hot to negotiate!

However don't go that long since you can pay it for the rest of your life!

This might sound mad, but often the redemption penalties that tie in borrowers only last for the first 10 years of a long-term mortgage. And more if you extend the time!

What if the house value falls?

However that's very unlikely since a house is something that is valued over the time over and over gain. However if you suspect your house is going to get a decrase in the value, get ready to sell it right now!

Prices depend on the confidence levels across the country, across different cities, and on buyers being able to get a mortgage and on the interest rates. The ongoing credit turmoil means that more people are being turned down by lenders and those who can get a mortgage are unlikely to be reassured by the fact that lenders share prices can be demolished by nothing more than rumours

In regions where confidence is a major factor and trust is everything in these situation the property owners should be prepared for some sort of fall, it's unavoidable. Miles Shipside, of the property website Rightmove.co.uk, says that some areas of the South-west and the south coast could see falls as wealthy would-be buyers keep their hands in their pockets and decide not to splurge on second homes in the current economic climate.

The economic climate is not the only factor determining the value of the property.

Certain homes in London and surrounding areas could also suffer. "Properties in the 750,000 to 3m brackets could fall, as these values are generally buoyed up by big City bonuses, which are looking less certain for the year ahead," says Shipside.

Learn more about this author, Pedro Pacheco.
Click here to send author comments or questions.

---

Add your voice

Know something about Surviving the economic crunch: What can you do??
We want to hear your view. Write now!