Mortgage rates drop but savers suffer - Money - News - Moneyfacts


Mortgage rates drop but savers suffer

Mortgage rates drop but savers suffer

Category: Money

Updated: 14/12/2012
First Published: 10/03/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Mortgage rates have been tumbling but savers have been suffering, according to new research from

The average 2 year fixed rate mortgage has dropped from 5.11% in November last year to 4.74% today.

However, in order to fund the cuts, providers have been reducing savings rates too.

The largest rate reductions have been seen on fixed rate bonds, while a number of easy access deals have also been withdrawn.

The only exception to the trend is ISAs, with rates having steadily risen as providers battle to attract savers' tax-free allowance, with the end of the tax year drawing near.

The average fixed rate ISA seen its rate rise by 0.40% since November to stand at 5.00% today, while variable rate ISAs have jumped 0.25% to 3.50%.

"Providers have moved their focus to the more profitable mortgage market, with savings rates being reduced to fund mortgage cuts," said Michelle Slade, spokesperson for

"Mortgage borrowers will of course be celebrating, but it is savers who are paying the price for homeowners' good fortune.

"The only real bright spot on the horizon are the ISA rates which are currently available.

"However, it might be wise to move quickly, as when the ISA season comes to an end next month, rates are likely to fall again."

Find the best savings accounts for you - Compare fixed rate cash ISAs

Find the best mortgage for you - Compare fixed rate mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

A quarter of Brits have fallen victim to a scam

Think you know how to spot a scam? It may not be as easy as you’d think, with 25% of Brits admitting that they’ve been the victim of one in the past, and a further 73% are concerned about being scammed in the future.

Brits’ bad spending habits revealed

Many of us like to think that we’re good with money, yet there are often things that get in the way of regular saving and financial security. Solution Loans has taken a look, and has identified the bad spending habits that leave us in the red.

Growing fears that inflation could impact wallets

We’ve all heard reports that the cost of food and petrol could increase in the next few months, together with the threat of rising inflation, and it seems that these concerns are beginning to take their toll on the nation’s consumers.