Boost for borrowers as mortgage rates fall - Mortgages - News - Moneyfacts

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Boost for borrowers as mortgage rates fall

Boost for borrowers as mortgage rates fall

Category: Mortgages

Updated: 12/11/2009
First Published: 12/11/2009

MONEYFACTS ARCHIVE
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 It is now over 6 months old so the content may be out of date.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 are slowly falling but still have scope to fall further, according to research from Moneyfacts.co.uk.

In the last few weeks, a number of lenders, including Abbey, Halifax, Leeds BS, Nationwide BS, Northern Rock and Woolwich, have cut their rates.

However, most still remain considerably shy of the lows at which they stood earlier in the year.

Despite originally reducing rates after the Bank of England slashed bank base rate to 0.50% in March, lenders subsequently increased them in the months that followed.

As a result, borrowers with a 40% deposit attempting to secure a £150,000 mortgage are currently paying £45 a month more than if the same deal had been taken out six months earlier.

"While lenders have made positive steps in reducing rates, more is still needed to counteract the large increases they made in previous months," said Michelle Slade, spokesperson for Moneyfacts.co.uk.

"The cost of funding the products on the swap rate market is lower than it was six months ago, so borrowers will be asking why the banks are taking an increased margin for the same deal."

Meanwhile, the research also revealed that credit conditions are slowly beginning to ease, with many lenders increasing the loan-to-value up to which their best deals are available and others moving to offer higher loan-to-value products.

These include Ipswich BS, Nationwide BS, Nottingham BS, Tipton & Coseley BS and Woolwich.

"In the last month alone the number of deals available to borrowers with a 10% deposit has increased from 88 to 109, while the total number of mortgages available has moved back over the 1,800 mark for the first time since January 2009," added Ms Slade.

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