In the last week, Moneyfacts has reported on average rises of 0.16% on 2 year fixed rate deals, with 5 year deals quickly following suit at 0.21%.

So what happened?

According to Moneyfacts this rise has been triggered as a consequence of inter-bank borrowing, and their rising costs. More expensive to borrow from, banks are now practically stumbling over one another as they try to pump up the cost of their fixed rate deals.

Is it that bad?

Now on the one hand you could argue that a 0.16% rise is nothing, but on a mortgage of £100,000 this could prove to be a substantial increase in the long term.

Take a look at the following scenario.

If for example you chose to invest in a £100,000 property (with a 25 year mortgage) on a fixed rate of 4.74%, that would equate to monthly repayments of £570. However, take this same property at an increased rate of 0.16% (bringing it to 4.9%) and you could face an additional monthly repayment of £9 (£579 in total).

On the outset, £9 extra a month is nothing, but spread that figure over a year and that is £108 more than you would have had to pay on a fixed rate deal of 4.74%.

When you examine the figures like this, it is easy to see why property courses encourage you to invest as soon as you can. If rates can change this much in a week, imagine what we could be facing in a year.

Wendy xx

I know many investors tell you to try and avoid student property, but I can’t see what the problem is? So I was wondering if anyone else has an opinion on it?

You see in an article I read the other day they talked about how of the 5.6 million students who choose to go to university each year, only 30.12% of them are provided with accommodation.

Do the maths and that means 3.85 million students across the whole of the UK have to look elsewhere to live.

Well I don’t know about you, but this got me intrigued, so I started looking around to see what the cash flow for these types of properties was and I was pleasantly surprised with the stats that I found.

Whilst universities on average charge £56.85 a week, in the private sector they only charge £51.57.

Now I know what you’re thinking – that these figures means property investors are earning less. But that is not strictly true. With such a saving more and more students are opting to rent privately.

With this point at the forefront of my mind, I decided to dig a little deeper to see what other locations were offering, and I have to admit I was impressed. They got better and better:

London: 102.85 a week
Leeds: £62.03 a week
Guildford: £61.88 a week

But now I don’t know what to do. Do I use this information to invest? Or do I keep looking?

What do you guys think? Any help on this topic would be greatly appreciated – get back to me xx