LOCK IN OR LOSE OUT AS HOME LOAN RATES HIT THE ROOF.
Although interest rates are always low at the time of a General Election they always RISE mid-term - by as much as four per cent.
On a pounds 50,000 loan that could push your repay-ments up by over pounds 200.
So ignore tempting two- and three-year deals and secure your home loan until 2002.
Most lenders expect rates to rise to between eight and nine per cent by the end of the year - whoever comes into power.
Not only will a four- to five-year fixed-rate deal give you peace of mind, but it will also end around the time of the next election - when rates will be low again and you can lock into another cheap deal.
Patrick Bunton of independent mortgage brokers London & Country, says: "It was only six years ago, half-way through the Tories' third term, that mortgage rates reached 15.5 per cent. But by the time they were re-elected they were under 11 per cent." Before you commit yourself, check redemption penalties. Some lenders force you to stay with them long after the fixed rate period ends, or face a stiff penalty.
Abbey National has just slashed one per cent off its five-year fixed rate loan to 6.99 per cent. But you need a 25 per cent deposit. Another option is a capped rate loan. These protect you from future mortgage rate rises, but allow you to benefit from lower rates if they fall. Colonial is offering a capped rate of 7.99 per cent for five years. Its current rate is 6.99 per cent.
However, Nia Williams, of the consumer magazine What Mortgage? believes you should look beyond offers when choosing a lender and go for "consistency of performance".
A What Mortgage? survey of 72 lenders found the little-known Chesham Building Society to be the best value lender over 10 years. Its 10-year loan of pounds 50,000 would have saved pounds 3,200 against Household Mortgage Corporation, the worst provider.
Of the national lenders, Nationwide came out top providing a pounds 2,000 saving over the HMC deal.