Lenders slash mortgage rates to the lowest levels on record
MORTGAGE interest rates have plummeted to an historic low, as lenders expect the Bank of England to persist with its loose monetary policy.
Both tracker and fixed rate mortgages have slipped to their cheapest levels since 1988, when the website Moneyfacts began collecting the data.
“An imminent rise in the Bank base rate now appears unlikely and the cost of funding on the swap rate market has reduced,” commented Michelle Slade from Moneyfacts.
The typical rate for a two year fixed deal is now 4.32 per cent, with a two year tracker averaging 3.37 per cent.
“Lenders appear to be applying cuts equally across all loan-to-value tiers,” Slade added, “which is good news for first-time buyers, as previously cuts were only being applied to the lower loan-to-value bands.”
Markets are now not expecting the Bank of England to begin normalising interest rates until July next year, Lloyds currency strategist Adrian Schmidt said yesterday.
Yet Schmidt added: “I think that’s too pessimistic. Our survey suggests the economic outlook is not as bad as priced in by the market.”