Home: Home Deals: Cushion the Blow of Rising Interest Rates

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AS widely predicted, interest rates have increased again and the Bank of England base rate has reached 4.5 per cent. House buyers will be looking for a nice low rate to make their new house affordable.

Despite the rate rise, there are still plenty of excellent deals on offer, although the lowest rates often tie you to the lender for a long time and have some pretty significant penalties.

If your main priority is keeping your payments down for the first year or two to let you settle into your new home, then there is plenty of choice.

Most of the lowest rates are either fixed rates or discount rates. Making the decision between these options depends on whether you think interest rates will continue to rise.

If they do, a fixed rate could offer the best value for money, but if not, a discount rate might be more worthwhile. Some of the lowest rates available are listed below:

A VERY LOW RATE One of the lowest rates currently on offer is available from the Portman Building Society.

This is a fixed rate of just 2.29 per cent until August 1, 2006. There is an arrangement fee of pounds 499 and after the fixed rate finishes, the rate reverts to Bank of England base rate plus 1.99 per cent. Unfortunately, the penalties on

this deal last until 2010 and start at seven per cent, reducing to two per cent over that period.

The loan is portable so you can take it with you should you choose to move in the future. …