Fixed Rate Loans at Lowest Level in 15 Years

Mon, 14 Jun 2010

The Bank of England has revealed that fixed rate mortgages are at their lowest level in fifteen years. With borrowers unsure of when the central bank will change interest rates, borrowers appear content to take advantage of the low interest rates being offered on tracker mortgages as the Bank of England continues to hold interest rates at the record low level of 0.5 per cent. Rates on fixed rate home loans have also fallen, but with lenders aware of the likelihood of the base rate being increased within the next 18 months, banks and lenders are reticent to drop rates too low. At present, lenders have cut rates by an average of around 25 per cent to 3.8 per cent.

Business Relationship Director at Spicerhaart, Alison Beech, says the current state of affairs is disadvantageous to first time buyers, many of whom do not have the 25 per cent equity required to quality for most fixed rate deals, and therefore remain vulnerable to the likely increase in interest rates on home loans over the next 18 months. Lenders are, however, relaxing their lending criteria, giving first time borrowers hope that they may be able to qualify for these deals in the coming months.
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