Two-year deals are not ideal cheap mortgages, says expert

People looking for cheap mortgages have been told to avoid the majority of two-year fixed deals.

Independent mortgage expert John Charcol said that the cheap mortgage products are being heavily promoted as they have eye-catching rates, but warned that the deals will end just as base rates get higher.

The comments from Ray Boulger, senior technical manager at John Charcol, come as the popularity of fixed mortgage rates decline, with the total number of products taken out dropping from 56.1 per cent of all sales in February to 41 per cent in April.

He said: "Two-year fixes only offer security during the period when it is least needed and if rates rise during that period it is only likely to be possible to re-fix at a higher rate after 2 years."

People seeking cheap mortgages in the short term are better off on a tracker or variable rate, he suggested.

New figures from the National Association of Estate Agents revealed that the average agent sold eight houses in April, the same amount of sales seen in March and February.

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2011-05-25 12:56:30 © Moneyextra.com