Special offers on mortgages

No sooner had the Bank of England decided to hold base rates at 6% earlier this week, than mortgage lenders began to unleash a torrent of special offers at fixed rates.

The Nationwide has a one-year fixed-rate mortgage priced at 5.75%. And the Alliance & Leicester's new deal is fixed at 5.99% until October 31, 2002.

For housebuyers in the market for a low-start rate, charcolonline has a combination of a fixed-rate and a tracker mortgage. Borrowers start off at 3.99% until October 31, 2001. Thereafter the rate climbs to 0.95% above base rates.

Anyone tempted to sign up for this deal should bear in mind that this week's interest rate reprieve could be shortlived.

According to John Charcol's Ray Boulger: "Gordon Brown's £42bn public spending spree can only give rise to inflationary pressures. This, compounded by a boost in consumer spending on the back of rising wages fuelled by skill shortages, could well see interest rates creep upwards."

Most City soothsayers seem to agree with his belief that one or maybe two 0.25% rate rises are on the cards.

Against this, Portman Building Society, has come up with a rapid response remortgage service, but only for cash-rich borrowers who can fund at least 25% of the value of the house them selves. The new mortgage comes with a discount of 1.5% off its standard variable rate of 7.49% until October 1, 2002. For borrowers who prefer stable repayments the society is lending at 5.99% fixed until October 1, 2002.

Stroud & Swindon Building Society is offering home loans fixed at 5.95% until November 1, 2002 to housebuyers who have saved up the typical 5% deposit.