Mortgages are obtained in order to complement the finance needed for the purchase of house. And the ease with which they are repaid in convenient monthly installments has increased the demand. But do all the mortgages that are availed are cheap? Not all of us are lucky and neither do we take efforts to mine the cheaper ones from the lending market. But yes you can find cheap mortgage rates if you are ready to search.

You must never forget that there are plenty of lenders who provide mortgages and hence, once you are prepared to search you will find that same mortgage scheme is available at cheaper rates. It is because lenders too are burdened with competition and they must comply with a chunk of their profit so that number of customers increases. This is why they slice the rates so as to attract customers.

Well, many of us have a knack of growing suspicious if it is available in cheap rates. And the same applies to mortgages as well. So, does it mean that cheap tesco mortgage rates are not genuine? There are some providers who use to cut the rates so that it can act as bait to customers and what they do is they compensate this by increasing other fees like application fees, mortgage lender valuation and so on. However, some lenders are genuine and they do furnish mortgages in a cheaper fashion. So, it is a good idea to look through the APRs (Annual Percentage Rates) which represents the accumulation of all the fees. The APR can give you a clear idea during comparison.

The mortgages are generally available as fixed rate mortgages or variable rate mortgages. Both have their pros and cons and you must weigh all your options and also seek the advice of experts before choosing one .Comparison sites are efficient when it comes to finding cheap mortgage rates. These sites provide you the facility of comparing all of the mortgage services and the features along with their rates, all at one place. Also, these sites only list those lenders or the lending enterprises that have a proven track record and are genuine.

In the last 2 weeks, we have seen 5 of the leading providers increase their rates. Barclaycard, Lombard Direct, The AA, Natwest and Tesco finance have all increased the rates on loans and this is a worrying thing for customers.

The good news is that not all companies have increased their rates; in fact some have done the complete opposite and reduced their rates on loans. Some companies have increased their rates by as much as 11% whilst others have reduced theirs by as much as 7%. This all means that you need to be extra careful when looking for the best deal for you as all may not be as it seems.

Adverts can mislead customers, the rates advertised are a typical rate and normally is higher for loans of a larger amount. However, a smaller amount can incur a higher rate so it is important to check what the rate is for what you need to borrow to avoid any nasty surprises when it comes to your repayments. For a rate to be called “typical” it must have been offered to at least 66% of customers and this means there is still 34% of customers who may have received a higher rate.

The best way to find the best deals on personal loans is to shop online, this way you can compare the leading providers and find the one that suits you. Do not assume your bank will offer the best deal so search around. On the other hand, do not make multiple applications as this leaves a black mark on your credit rating which can result in a higher rate offered to you when you application is approved.

Despite some lenders increasing their rates on personal loans , some have reduced them which means shopping around for the best personal loans is imperative. Shopping online will help find the best deals on loans by comparing the leading lenders.

i’m looking to borrow 10000 and they are the best so far, anyone eles been with them??

Consumers are finding that numerous avenues of borrowing are becoming increasingly expensive, new research shows.

During the current period of strain on the financial markets, Moneyfacts reveals that it is not just mortgage products which are getting to be evermore costly as financial services firm tighten their application criteria, withdraw their most favourable deals and increase interest and fee charges. The same is also happening to personal loans. Research carried out by the personal finance publication revealed that since the start of 2008 over half of those money lenders which offer such loans have changed their rates.

Those providers which have increased their rates were shown to include Black Horse. At the start of this year the firm charged 16.9 per cent in interest on a 1,000 pound loan repayable over a 12-month period. However, interest now stands at 27.9 per cent, causing the overall repayment to be made to increase by 52 pounds and 68 pence. Meanwhile, interest on a 7,500 pound loan from the same supplier paid over five years has gone up from 11.9 per cent to 16.9 per cent during the space of four months.

Loans of more expensive amounts were also shown to have increased. For those borrowing 25,000 pounds from NatWest during a five-year period, the average monthly repayment has gone from 497 pounds and eight pence to 514 pounds, as the interest charged has gone up to 8.9 per cent. Over the duration of the loan, the increase means that an extra 1,015 pounds and 20 pence in repayments will have to be made. Meanwhile, loans of this amount were also indicated as rising for those offered by Northern Bank and the Royal Bank of Scotland.

Following on from facing increased costs when making repayments on personal loans, it may also be likely that borrowers come under additional strain to meet other demands on their spending in areas such as credit cards, household bills and mortgage payments.

The personal finance publication stated: “It’s not only mortgage rates that continue to increase, so too have the rates and monthly repayments on personal loans. In the last two weeks alone we have seen Barclaycard (+0.50 per cent), Lombard Direct (+1.0 per cent), the AA (+0.10 per cent), NatWest (+2.50 per cent) and Tesco Personal Finance (+0.6 per cent) all push selected rates upwards. On top of this Barclaycard has pulled the one time best buy product offered through its Masterloan brand.”

As such, those looking to take out a cheap loan were urged to take the time to shop around for a competitive deal and avoid assuming that their bank will automatically provide them with the best offer possible.

Meanwhile, borrowers were advised that the typical rate a loan is advertised at may not be the one they actually receive. In addition, it was claimed that taking out payment protection insurance from a loan provider can be “very expensive” and that should consumers wish to protect their repayments they should take out cover from an independent supplier.

For Britons who are struggling with their finances, taking out a cheap loan as a means of debt consolidation could be advisable. After securing a low-rate loan, consumers might find that they are able to merge numerous financial constraints into a single affordable monthly repayment.

A debt consolidation loan could prove to be particularly effective for a number of homeowners after a recent Defaqto study showed that loading above the bank base rate on tracker mortgages has increased over recent months to currently stand at 1.16 per cent. Meanwhile, the number of such financial products available has dropped to 452, down from the 591 recorded last summer.

It is no surprise to any of us that interest rates have risen and are still rising and lenders are able to be choosy so borrowing on a whim is no longer possible.

The credit crunch has made borrowing prohibitive as the bank loan rates have soared on personal loans and mortgages. The popular lenders have made increases in the last couple of weeks including Nat West with a 2.5 per cent rise.

Michelle Slade from the financial comparison website Moneyfacts.co.uk says, “It is not only mortgage rates that continue to increase, so have personal loan rates and monthly repayments.”

She says Tesco Personal Finance has gone up another 0.6 per cent, Lombard Direct has gone up 1 per cent, the AA is up 0.1 per cent and Barclaycard rates have increased by 0.5 per cent. Barclaycard have also put a stop on their one-time best-buy product which they used to offer through Masterloan.

At least half of the lenders who offer personal loans have altered their charges since the beginning of the year.

An increase of 11 per cent on smaller loans by Black Horse has seen an addition of 52 pounds and 68 pence in interest, per year, on a 1,000 pound, one-year loan.

To borrow 25,000 pounds from the Nat West over 5 years with a rate increase of 1.5 per cent on these bigger amounts, will see an extra 1,015 pounds and 20 pence on the total cost of the loan.

Some lenders have actually reduced rates. Brittania BS and Moneyback Bank lowered rates at the beginning of 2008 and a loan for 5,000 pounds with the Clydesdale Bank or Yorkshire Bank can cost up to 7 per cent less than before.

The experts are all echoing that in such glum economic circumstances and family budgets are really being squeezed borrowing should be thought about.

Steve Wilcox at Citizens Advice warns, “The fact that a lender has approved your loan does not mean you can afford the repayments, “and he goes on to say, “Loans are not for paying off current borrowings or to buy everyday essentials such as food or energy. While there is a credit crunch on, lenders still need to make some money but borrowers must be extra-careful that they can afford repayments.”

Do not forget, if you can justify borrowing, that the “typical rate” may not be the rate that you will be offered. By law a “typical rate” must be offered to a minimum of 66 per cent of approved borrowers, which leaves a remaining third that may well be charged a higher rate.

As we know, lenders are picky so you may not qualify for a loan if your credit history is nothing other than perfect; the slightest blip may cause your application to be turned down flat.

Also, buying Payment Protection Insurance from your lender is not a good move and can cost you thousands. If you want this cover go for independent cover from insurers like britishinsure.com or paymentcare.co.uk.

Another mistake is to assume that your own bank will offer you the best the deal – get quotes from other lenders.

You must not forget that every application you make for a loan will leave a footprint on your credit file which in turn might push up the rate that you are offered or you could result in being refused by lenders contacted subsequently.

Two UK supermarket giants, Tesco and Sainsbury’s, are presently offering their customers an astonishing new deal on credit card shopping.

Unbelievably, you can pay for all your purchases by credit card and – wait for it – pay 0% interest for a whole year.

Yes, 0%! Too good to be true? We kid you not; this is a genuine bargain deal too good by far to turn up.

Let us tell you how to avoid getting your fingers burnt by the interest bogeyman and how to make the most of this exciting offer.

What is the deal?

Tesco will give you 13 months totally interest-free shopping using their Clubcard credit card for all Tesco purchases and what’s more, they will also give you exactly the same interest free rate deal on non-Tesco purchases, but in that case the interest-free holiday is for three months only.

Sainsbury’s will similarly offer you 12 months of interest-free shopping with their new credit card on all Sainsbury’s purchases and, as with Tesco, the same interest-free rate on non-Sainsbury’s shopping for three months.

The Good News

The primary advantage of this deal is that shoppers are able to pay off their credit card bill over some months without having any interest tagged on.

This is a huge plus and is most appealing should you want to buy a large expensive household item that might be too costly to pay off in one shot. Now you can afford to splash out a bit without the dreaded interest hoodoo lurking in the wings.

On-line purchases through Tesco Direct and Sainsbury’s online facility are included in the interest-free deals.

This can make your life a whole lot simpler, as it is possible to buy expensive merchandise from them such as fridges, washers, electric heaters and so on.

The Tesco card charges no interest at all on balance transfers for the first 13 months and Sainsbury’s likewise, but for just a year, and neither card charges an annual fee.

Another very useful advantage with both cards is that you can score bonus points. The more you spend, the more bonus points you get. As the saying goes – ‘what a bonus’!

Tesco awards you 5 Clubcard points for every £4 you spend with them and 1 Clubcard point for every £4 spent somewhere else. Sainsbury’s, on the other hand, gives you 4 Nectar points, as they call it, for every £1 spent at Sainsbury’s and 1 Nectar point for every £5 spent elsewhere.

The Not-so-good News

If you stick rigidly to their rules, these credit card deals can be most helpful in keeping your budget afloat. But be warned that if you neglect to settle up your credit card bill within the interest-free time stipulated, the penalties are high.

The Tesco card APR is 15.9% and the Sainsbury’s card 16.9%.

Pretty high, although it could be worse, and it reverses any benefit gained from the 0% interest offer.

So remember:

A good way to avoid making a costly error like this is to clearly mark the end of your interest-free period on your calendar or in your diary or on your fridge door. Alternatively, pre-set your mobile or your Blackberry to alert you in good time.

Be quite clear in your own mind what constitutes interest-free and what doesn’t. Withdrawing cash from the machine is definitely not interest free. It is expensive and is to be totally avoided. Tesco charges an agonising 24.942% APR on cash withdrawal transactions and Sainsbury’s charge 19.95%! Painful, to say the least!

Be very aware of the term ‘Allocation of Payments’. This means that you will have to pay the highest interest transactions off last, so until you clear your card completely any cash transactions may be hanging in there attracting interest until the very end. And you thought root canal treatment was painful.

Another important point to keep in mind is that any non-Tesco or non-Sainsbury’s shopping that you do will cost you an arm and a leg if not paid off within the three-month interest-free holiday period. When the three months is up, it is the Allocation of Payments story again. When that kicks in you will accrue interest and any repayments you make will either come off the Tesco/Sainsbury’s purchases or balance transfers first.

In short then, know exactly when your interest-free periods finish up and ensure that you have cleared the balance before then to avoid a lightning bolt shock to the system – and the wallet.

Are these interest-free credit cards the thing for you?

Yes, most certainly, if (a) you are a regular customer of either Tesco or Sainsbury’s OR (b) you would like to buy something expensive and know you will be able to pay it off fully within the interest-free period, OR (c) cash advances are not for you.

No, not advisable if (a) you are only a casual shopper at Tesco or Sainsbury’s, OR (b) if you are the absent-minded type who might forget when the interest-free period is due to expire, OR (c) if you like to take cash out with your credit card, OR (d) if you are unsure whether you will be able to settle the balance on the card before the interest-free period ends, OR (e) if you are going to use the card to pay for your shopping simply to avoid spending the cash in your pocket.

What does the jury say?

“There is really nothing to fear with using interest-free credit cards, such as those offered by Tesco and Sainsbury’s supermarkets, as long as you fully understand the terms and conditions under which they issue them,” says Lyndsey Burton, director of personal finance comparison site ChooseMoney.co.uk, which lets you compare credit cards as well as compare loans, insurance, current accounts and savings accounts.

“There is no off-putting small print but you do need to clearly understand what you are letting yourself in for and what you need to do to get the best out of these very attractive and money-saving offers. They are really a fantastic way to save money and keep your budget in trim, and can only be an asset provided that you take care not to allow yourself to fall foul of the interest trap.”

She advises a little care and a reliable reminder system will prevent that and enable you take full advantage of a great offer.

BUT – you do need to be very sure that you know what is involved right up front and as we have warned you before, don’t ignore the interest deadlines.

Happy shopping!

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