Rates started a slow descent shortly after the Government’s Funding for Lending Scheme began last August and have picked up speed with new ‘best ever’ deals coming onto the market almost daily.
We are currently experiencing the lowest two, three and five year average fixed rate mortgages seen since their launch in 1989.
Bank of England Base Rate fell to its current historic low in March 2009; four years later and it has been matched with historically low mortgage rates too.
Not only are averages in freefall, many individual providers are joining the downward race with gusto as those that have joined the FLS must increase their loan books or face stiff penalties.
Sylvia Waycot, Editor at Moneyfacts.co.uk, said:
“At last we have some good news to talk about with regards to finance; fixed mortgage rates are coming down.
“Of course, this doesn’t mean it will be any easier to get a mortgage approved, you will still need to have a clean credit record, income sufficient to not only pay today’s mortgage rate but also potential future increases and of course the stickler for most, the deposit.
“But if you can satisfy the banks’ lending criteria and have a deposit or equity from a current house, then there are some amazing offers to be had.
“Recent criticism levied at banks was that they were offering the best mortgage deals in the less risky 60% loan-to-value tier. It is good news on that front too, as some very attractive higher LTV loans are at last entering the market.
“To put the current rates into context, if you had opted for a two year fixed in June 1989, you would have paid an average rate of 12.83% (the least competitive rate was a breath stopping 13.20%). A five year fixed averaged out at 12.85%.”
