Tue 26 Jul 2016
Moneyfact’s spokeswoman Charlotte Nelson, in a review of 2016 to date, says that mortgage rates have fallen to record lows yet again and show no signs of stopping.
“Borrowers looking for a new mortgage deal today will be substantially better off than they were six months ago. Anyone considering a five-year fixed rate mortgage today would save themselves £240 a year compared to January” she says, basing her figures on the current average five-year fixed mortgage interest rate and a £200,000 mortgage over a 25-year term on a repayment basis.
“Long-term fixed rates have benefited from the recent plummet in swap rates and it isn’t only the more acceptable five-year fixed rates that have fallen. The 10-year fixed rate sector has seen a boom in products available from 80 in January to 127 today, and the average rate falling by 0.20 per cent in the same period” she adds.
She says borrowers with smaller deposits have also benefited with the average two-year fixed rate at 95 per cent loan-to-value falling by 0.19 per cent from January 2016 to 4.09 per cent today.
But Nelson warns that “with the Help to Buy Mortgage Guarantee scheme ending in December this year, it begs the question of how long this can be sustained.”
She says that despite wider economic uncertainty after the EU referendum, fierce mortgage competition looks here to stay “and borrowers sitting on the Standard Variable Rate or coming to the end of their mortgage deal would be wise to consider a fixed rate deal now, when they are still at record lows.”
Source: Estate Agent Today