Best of the Week
Most Popular
1. Best Cash ISA Savings Account for Soaring UK Inflation - February 2018 - Nadeem_Walayat
2.Gold Price Forecast 2018 - February Update - Nadeem_Walayat
3.Bitcoin Crypto Currencies Crash 2018, Are We Near the Bottom? - Nadeem_Walayat
4.Trump Bubble Bursts, Stock Market Panic Dow 1175 Point Crash Analysis - Nadeem_Walayat
5.Gold Corrects, Bitcoin Markets Crash, Whilst Stocks Plunge - Nadeem_Walayat
6.US Treasury Bonds: Fuse to Light the Bonfire - Jim_Willie_CB
7.Dow Falls 666 Points As Cryptocurrencies Crash And Krugman Emerges From His Van - Jeff_Berwick
8.Stock Market Roller Coaster Crash Ride Down to Dow Forecast 23,000 - Nadeem_Walayat
9.Trading the Shadows - Oil, Dollar, Stocks, Gold Trend Analysis - B.R. Hollister
10.Stock Market Analysis: Baying for Blood - Abalgorithm
Last 7 days
Goofy Indictments Divert Attention from Criminal Abuses at the FBI and DOJ - 21st Feb 18
Bitcoin or British Pound ‘Pretty Much Failed’ As Currency? - 21st Feb 18
Stock Market Waiting for the Fed - 21st Feb 18
National Identity Demands Restrictive Immigration - 21st Feb 18
Best Opportunities for Freelance Technical Writing Jobs - 21st Feb 18
4% US 10-year Treasury Note Yield Will Be a Floor Not a Ceiling - 20th Feb 18
Governments Are LYING about Their Gold Activities while Mining Companies Cower - 20th Feb 18
No Silver Lining Here - 20th Feb 18
Semi Conductor Stocks SEMI Bearish? - 20th Feb 18
The Prisoner Promised Land - 20th Feb 18
Best Car Dash Cam Review: Z-Edge S3 Dual Dash Cam - UNBOXING (1) - 20th Feb 18
How Inflation Reduces The Real Value Of Social Security Net Of Medicare Premiums - 19th Feb 18
Could Stellar Lumens be a Challenger to Bitcoin for International Payments? - 19th Feb 18
US-China Trade War Escalates As Further Measures Are Taken - 19th Feb 18
How To Trade Gold Stocks with Momentum - 19th Feb 18
Is a New Gold Bull Market on the Horizon? - 19th Feb 18
Stock Market Decision Point! - 19th Feb 18
An Inflation Indicator to Watch, Part 1 - 18th Feb 18
Get on Top Of Debt Before It Gets on Top of You - 18th Feb 18
Will the Stock Market Make a Double Bottom? - 18th Feb 18
5 Reasons Why Commodities Are the Investment Place to be in 2018 - 18th Feb 18
1 Week Later, Stock, Bond Market Risk Remains ‘On’ as 2 of 3 Amigos Ride On - 17th Feb 18
Crude Oil Prices: A Case of Dueling Narratives? - 17th Feb 18
Free 1000 Youtube Subscribers Services - YTpals, Subpals, SubmeNow Test - 17th Feb 18
How to Trade as We Near March Stock Market Top - 16th Feb 18
Bitcoin as Poison - 16th Feb 18
GDX Gold ETF Weathers Stock Market Selloff - 16th Feb 18
Casino Statistics and Demographics - 16th Feb 18
IS Today Thee Stock Market Turn Day? - 16th Feb 18
Huge SMIGGLE Shopping HAUL, Pencil Cases, Drinks Bottles, Back Packs, Toys.... - 16th Feb 18
Tesla Cash Keeps Burning at $320 a Share - 15th Feb 18
Big Conflict Ahead in the Financial Markets - 15th Feb 18
Stocks Extend Rally Off Friday's Low, But Short-Term Exhaustion Near - 15th Feb 18
Stock Market Out on a Limb... - 15th Feb 18
Things Only a True Friend Would Say About Gold - 14th Feb 18
Global Debt Crisis II Cometh - 14th Feb 18
Understanding Crude Oil Behavior - 14th Feb 18
Stock Market is Getting Scary... - 14th Feb 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

UK Tumbling Mortgage Interest Rates Are Still No Incentive to Borrowers

Housing-Market / Mortgages May 27, 2010 - 07:34 AM GMT

By: MoneyFacts

Housing-Market

Mortgage rates are being cut, lending criteria is steadily being loosened and product availability is improving. It appears to be a perfect platform to host a resurgence in a struggling mortgage market, but it looks as if there is still little incentive for borrowers to commit to a new deal.


Since the Bank base rate hit 0.50% nearly fifteen months ago, many existing borrowers have seen their interest rate fall and a wise move would have been to overpay their mortgage with any gains. Some borrowers are doing more by off-loading their savings pot into their mortgage as well.

The average two year fixed mortgage rate has fallen to 4.61%, its lowest level in 15 months. The average three and five year fixed rates are also on the decline, at 5.30% and 5.74% respectively.

Mortgage

Average rate at peak (since base rate been at 0.50%)

Average rate today

Reduction in monthly mortgage payment*

2 Year Fixed 5.21% 4.61% £52pm
3 Year Fixed 5.61% 5.30% £28pm
5 Year Fixed 6.24% 5.74% £46pm

* Figures based on £150,000 repayment mortgage
Source: Moneyfacts.co.uk 27.05.10

The average two year fixed mortgage rate in May 2008 was 6.59%. Reverting to the current average standard variable rate of 4.66% on a £150,000 mortgage would save homeowners £164.38 per month. Those fortunate enough to revert to a low standard variable rate of 2.50% would save £330.18 per month

Darren Cook, spokesperson for Moneyfacts.co.uk commented: “Lenders are easing their criteria and competition is returning to the market, which should be a perfect platform for a resurgent mortgage market.

“Lenders are competing for a reducing amount of business and there is little incentive for borrowers to remortgage to another mortgage deal.

“Mortgage revert rates as low as 2.50% have meant borrowers should have taken the wise decision to overpay their mortgage.

“Borrowers who have gained from a mortgage interest windfall and absorbed their savings into their monthly expenses may need to start preparing if interest rates go up as quickly as they came down.

“A spiralling inflation rate, which could be aggravated by the predicted rise in VAT, can only point towards a Bank base rate increase sooner rather than later.

“A bank base rate increase would not be the best news for borrowers, but an imminent rise should stop savers finding other uses for their hard earned savings pots”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules