23
Nov
Mortgage rates dip to autumn low
The average interest charged on a two-year fixed-rate mortgage
has fallen below 5% for the first time since June, according to
Moneyfacts.
Prices had risen during July when the average cost peaked at
5.21% by the end of the month.
The financial information service suggested that competition was
now increasing among home loan providers.
However, the cost for those homeowners looking to fix their
repayments over a longer period has continued to rise.
"Swap rates have been falling over the last few weeks, but
mortgage rates on medium-term deals are yet to follow suit," said
Michelle Slade of Moneyfacts.
"Borrowers will be hoping the easing of credit criteria
continues and that lenders will start to reduce the large margin
for risk they have been taking over the last year."
Positive signs
She said that there were signs that the worst of the squeeze for
mortgage borrowers could be over, after many potential owners -
especially first-time buyers - found that they have had to offer a
large deposit.
"Borrowers are finally starting to see more positive news coming
out of the mortgage market," she said.
"Lenders have become accustomed to the post banking-collapse
world and appear to finally be relaxing their credit criteria."
Separate research by price comparison website
Moneysupermarket.com has found that people are still reverting to
their lender's standard variable rate (SVR) instead of
remortgaging.
Consequently SVR rates have risen, and now stand at an average
of 4.7%, according to the website's figures.
"Borrowers need to be aware that lenders are free to price their
SVR as they please," said Hannah-Mercedes Skenfield, of
Moneysupermarket.
The latest data on mortgage lending by the major banks will be
published on Tuesday.
source: www.bbc.co.uk/news Monday 23rd
November 2009