by Mark Johnston
Deals are getting progressively cheaper. Industry insiders have commented that borrower’s who are planning to re-mortgage or those wanting a first home may find that deals in the market are getting better. The more competitive mortgage lenders become the better the mortgage deals will be for the borrowers.
The Bank of England’s Monetary Policy Committee recently released the minutes from their meeting in April and there were huge signs of what may happen next. The minutes also went quite a way to dispel rumours in the mortgage industry that the Bank of England will put up interest rates in the next few months.
This has lead some lenders like Skipton Building Society and Woolich to focus on cutting their prices in a n effort to attract new customers and first time buyers. The first time buyers have a mortgage deal on offer from Skipton for a 5.09 per cent rate with a 90 per cent loan to value rate.
The mortgage rate price war is heating up as lenders try and cut their rates on fixed rates and tracker mortgages in an effort to bring in new customers and tempt existing customers to release equity. for those borrowers who have a large enough deposit, the range of mortgage and re-mortgage deals on offer is greater as we head into the home buying season. Things are heating up even more now that the Bank of England has decided to maintain interest rates.
The Bank of England’s Andrew Sentence has warned that interest rates could “quadruple in a year” hugely impacting average households. In a recent statement, Andrew has predicted that the base rate will be as high as 2 per cent by next year, suggesting that if interest rates don’t go up, it would put Brittan in a more difficult economic situation.
Brian Murphy, from the Mortgage Advice Bureau said “What is happening is that the money markets priced a more immediate Bank rate rise into the cost of mortgages. Now it seems that this may not take place until August or even next year. This is starting to feed through to rates,”
Ray Boulger, who is currently the technical director for Charcol said that “Fixed rates could go even lower. The market is still anticipating rates going up more quickly than they actually will. The fact that inflation went down rather than up last month was a bit of a game changer,” and went to the extent to say that “Fixed rates could get as low as 4 per cent.” Yorkshire Building Society has a 4.19 per cent five year mortgage deal which could tempt business over their way.
These rates will go down but there is a strong suspicion that lenders will cap how low they are all prepared to go. The prices will not stay low for long too but I would say that mortgage rates and deals are near the lowest that they will be for a very long time so locking in one of the good deals out in the market today could be a very smart move.
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