Fixed mortgages netting record profits

Profits being made on fixed-rate deals by mortgage lenders have hit an all-time high, despite the industry seeing more competition, according to new figures.

Fixed-rate costs have been steadily reducing during 2010 as brokers try to tempt people into remortgaging their existing variable-rate deals.

Mortgages fixed for five years now cost an average 5.56% - 3.11% more than a typical five-year swap rate from which the fixed rates are usually derived, providing a record profit margin on a five-year deal.

Profits from mortgages fixed for three years are also at a new average high of 3.38% on a 5.15% rate.

Two-year deals are running at a margin of 3.14%, a four-month high. This is in the face of a reduction in the average cost of the product from 4.93% in January to 4.54%.

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