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Mixed year for mortgage borrowers

Mixed year for mortgage borrowers

Category: Mortgages

Updated: 23/12/2009
First Published: 23/12/2009

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 It is now over 6 months old so the content may be out of date.

2009 has been a mixed year for mortgage borrowers, according to the latest data from Moneyfacts.co.uk.

With base rate falling to an all time low of 0.5% in March, borrowers on existing tracker deals and standard variable rate saw their repayments plummet.

The average two year tracker mortgage rate fell by 0.79% since the turn of the year, while the average lifetime tracker rate dropped 0.73% in that time.

However, those borrowers looking to secure a new deal, and in particular a fixed rate, have been less fortunate, and in some cases seen rates rise.

Average two year fixed rates fell by 0.54% and three year rates by 0.49%. Five year rates, however, increased by 0.19%.

"Only in the last month, as lenders become more accustomed to the post banking crisis world, have we seen competition start to return to the market," said Michelle Slade, spokesperson at Moneyfacts.co.uk.

"Borrowers will be hoping that 2010 will see lenders reducing the perceived excessive margin for risk, with rates continuing to fall, and that the tentative steps being taken to offer competitive rates at higher loan to value levels will continue."

It was also revealed that the total number of mortgage products available in the market shrank by almost 13% in the last 12 months, while the average fee fell by almost a quarter to £918.

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