Borrowers continue to benefit from cheap mortgages

September 2nd 2016
By: Mary.Wilkins
Borrowers continue to benefit from cheap mortgages

There has never been a better time to access cheap mortgages, as fierce competition continues to drive down fixed mortgage rates. The BOE, Bank of England, also cut back interest rates on 4th August from 0.5% to 0.25% - a record low, in a bid to encourage more lenders to pass on low rates to borrowers.
According to MoneyFacts the average two-year fixed mortgage has fallen from 2.68% to 2.48% in the past 12 months.
Five-year fixed rates are also at their lowest - 3.08% - and for a 10-year fixed rate mortgage borrowers are looking at 3.37%.
MoneyFacts state that swap rates and inter-bank lending rates plummeted after the vote to leave the EU which has resulted in lenders being able to borrow cheaply and pass on these savings to property buyers.

Ms Nelson from Money Facts told the Telegraph: “With the average SVR standing at 4.8% today a cut in Bank Rate will have little effect. Borrowers sitting on this option would be significantly better off if they shopped around and opted for a low fixed rate deal instead.”

“With the economic uncertainty and fixed rates currently lowest on record anyone coming to the end of their deal or sitting on their standard variable rate SVR would be wise to consider a fixed rate deal,” she said.
However, mortgage falls are not predicted to continue so if you are looking at accessing a new mortgage or remortgaging your property this could be the best time to lock into a fixed deal. The Funding for Lending scheme which started in 2012 to encourage cheap lending to borrowers runs out in 2018, so we could start to see lending prices rise after this time.
If you would like help and advice on buying a property why not pop into your local branch of Goodfellows or give our team a call on: 020 8102 0554.
Source: The Telegraph