With so much market volatility and a tremendous level of concern over the state of the fiscal markets, a fixed mortgage only makes sense for those who are hoping to purchase a home and save money in the process. Keeping a realistic price on the home itself and securing a fixed mortgage can save all manner of money for the homeowner in the long run.

Richard Morea of London and Country noted, “Homeowners are catching it from all angles not only with higher mortgage rates but increasing fuel, food and energy costs. It’’s unsurprising that they are demonstrating a siege mentality.”

‘Both fixed and tracker rates have come down over the past couple of weeks and there is probably not a lot of difference between what you would pay now and what you paid a year ago,’ Morea added.

‘But there is still limited availability of funds and lenders have no appetite for high loans-to-value. It is difficult to predict how the market will react come September and it will be a very interesting to see if volumes pick up again.’

‘Both fixed and tracker rates have come down over the past couple of weeks and there is probably not a lot of difference between what you would pay now and what you paid a year ago,’ says Richard Morea of London & Country.

‘But there is still limited availability of funds and lenders have no appetite for high loans-to-value. It is difficult to predict how the market will react come September and it will be a very interesting to see if volumes pick up again.’

Melanie Bien, director of independent mortgage broker Savills Private Finance, said: “Rising mortgage and other living costs are behind the increase in repossessions as people struggle to pay the bills.

“The situation is likely to get worse with rising food, fuel and mortgage costs as borrowers come off relatively cheap two-year fixed rates and remortgage onto more expensive deals or onto their lender’s standard variable rate until pricing comes down.”

Melanie Bien, a director at Savills Private Finance, says: “With the cost of two-year fixed rates in particular rising in the past year on the back of higher swap rates, longer-term fixes appear more attractive in comparison.

“The greatest advantage of fixing for a long period of time is that it removes the need to remortgage every couple of years which, with rising arrangement fees, can be expensive. Fees remain competitive on long-term fixes, plus you only have to pay them once.

“The downside of fixing for 25 years is that there are often hefty early repayment charges (ERCs) if you try to clear the mortgage early or switch to another deal.”

“We believe this product offers a genuine alternative for those borrowers who would prefer to fix their monthly payment at a lower rate than would otherwise be available,” said Cate Hillis, Accord Mortgages’ strategic development director.

“With increasing food and utility bills, as well as the payment shock facing many borrowers coming to the end of their current fixed rate, this could be a genuine alternative.

“While the fee is comparatively high, this can be added to the loan and the mortgage allows overpayments up to ten per cent per annum should borrowers find themselves in a position to repay more quickly.

“We know this product isn’t for everyone and we have a broad range of low fee and no fee product options available,”

The director of fairinvestment.co.uk, the company that sponsored the research, James Caldwell, said: “Our research was surprising considering how high mortgage rates are in the current market. For 25 per cent of our respondents to say they would choose a short term year fixed-rate (up to five years), despite the fact they are unlikely to find a rate under 7 per cent, suggests that people do not have much confidence in the chances of the mortgage market recovering within the next five years.”

City commentator and chairman of stockbrokers Collins Stewart, Terry Smith warned that: “We are nearer the beginning than the end. I’m afraid there is going to be more pain – quite a lot, actually.”

“It is an extremely worrying time for anyone coming to the end of a fixed rate deal,” says Darren Cook, mortgage expert at Moneyfacts. “Borrowers coming to the end of a three year fixed rate deal, looking to fix for another three years could see a £158.23 increase in their monthly repayments (on a £150K mortgage), equating to an additional £5,896.28 in true cost over the three years.”

“There are still a handful of sub 6 percent deals, but these come with such high fees that any benefit from having the slightly lower rate is likely to be wiped out by the fee,” added Cook.

“There doesn’t appear to be any let up in the misery for borrowers. Lenders need to start playing the game fairly and pass on the cut in swap rates as quickly as they pass on the increase.”

“Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased,” the Fed stated in their release.

 “While the (Fed) sees greater upside risk to inflation than it has previously, it stopped far short of signaling a timetable or even a commitment for a rate hike,” Citigroup economist Robert DiClemente said in a note to clients. “We see policy settling into a watchful, waiting mode, perhaps considerably longer than markets expect.”

Despite this, there is still word that European banks will raise rates. Jean-Claude Trichet, the president of the European Central Bank stated,  “I said we could decide to move our rates by a small amount in our next meeting in order to secure this solid anchoring of inflation expectations. I said it’s possible. I didn’t say that we would envisage a series of increases. I didn’t say that. That being said … of course we never pre-commit. The observers, the market, know that pretty well.”

“Fixes are popular because the future direction of interest rates is so uncertain,” says David Hollingworth of broker London and Country. “There is a lot of noise out there and alarming headlines. People want stable payments. They want to dissociate their finances from rate moves.”

Drew Wotherspoon from broker Charcol adds: “De- pressingly for borrowers, it will not end here, with other [lenders] certain to follow. So the message for those who want a fixed rate is act now.”

“The devil is always in the detail with fixed mortgages Ð some of the fees for coming out of a deal early can be punitive,” says Sean Gardner from comparison site MoneyExpert.com.