Cheapest mortgage rates in 23 years!
July 5, 2011 by Charlie Stedman · Leave a Comment
Interest rates on new mortgages just keep falling…
Here’s a sentence I bet you didn’t expect to read today:
Mortgage rates haven’t been this low since Yazz and Plastic Population topped the singles charts with The Only Way Is Up.
Yes, according to Moneyfacts, when it comes to new mortgages – the only way is actually down. Figures from the financial data site show that interest rates are now sat at the lowest level since its records began back in 1988. That’s a whopping 23 years, or to put it another way – my life thus far!
Just take a look at these current average rates for various types of mortgages…
So why are mortgages currently so cheap?
Last month I reported that despite the current unstable financial climate, it may still be a good idea to plump for a variable mortgage that tracks the Bank of England Base Rate. Inflation may still be very high, but with economic growth still faltering and a Bank of England committee that seems committed to keeping interest rates low, we could be in for a good few more months with a 0.5% Base Rate.
And indeed it seems that the international money markets are accepting the Bank of England’s reluctance to up rates. As a result, this is pushing down the costs of borrowing for mortgage lenders and allowing them to drop their interest rates for home buyers.
Something of a ‘race to the bottom’ is also lowering mortgage prices. This is in part fuelled by the Spring buying season as lenders attempt to outflank each other on rates.
It all kicked off back in early May as Barclays, Skipton, Halifax, Northern Rock and HSBC all chopped their rates. Nationwide and Yorkshire Building Society have recently followed suit offering sub-4% five-year fixes for those with 30% and 25% deposits respectively. You can even snap up a mortgage with Woolwich for less than 3% if you can put up a 30% deposit and lock in for just two years.
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