Fixed Rate Home Loan Market Hits Rock Bottom

Fri, 27 Mar 2009

Mortgage brokers have claimed that interest rate on fixed rate loans have hit rock bottom. In fact, the experts are claiming that money markets are indicating that rock bottom may have been reached two weeks ago, as rates slumped below 3 per cent to 2.96 per cent. Rates have since risen to 3.15 per cent, though high street lenders have continued to cut rates on fixed rate deals this week.

Although homeowners on standard variable rates have enjoyed the plummeting interest rates of late, it is feared that the one million plus homeowners on such deals will face rising rates as banks respond to increasing gilt yields. Whilst the will be no rapid rise in interest rates, further decreases are said to be unlikely.

The news will be of particular interest to homeowners whose fixed rate deals have already expired, but are awaiting better deals as banks continue to decrease rates. Abbey, Alliance and Leicester, Woolwich and Yorkshire Bank have all lowered their rates in recent days and weeks, though it is HSBC who are currently offering the best fixed rate deal, with a five year fixed rate of 3.99 per cent for borrowers who can provide a 40 per cent deposit.
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