Fixed rate mortgage costs drop to new low - Mortgages - News |

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Fixed rate mortgage costs drop to new low

Fixed rate mortgage costs drop to new low

Category: Mortgages

Updated: 11/06/2010
First Published: 11/06/2010

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 It is now over 6 months old so the content may be out of date.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 borrowers have been given a massive boost after the cost of fixed rate mortgage deals dropped to a record low.

Official figures from the Bank of England showed that the average interest rate on a two year fixed rate mortgage for borrowers with a 25% deposit dropped to 3.8% last month.

Rates have been in decline since reaching 4.47% in September last year, and have now dropped to their lowest level since records began 15 years ago.

The average rate charged on a five year fixed rate mortgage deal also fell, dropping to 5.39%, the lowest the rate has been for a year.

There was also another drop in the rates charged on tracker mortgage deals, on which the average rate is now 3.7%.

With the news coming before the Bank of England announced its decision to keep base rate at its record low of 0.5% for the fifteenth month in a row, hopes are high that further reductions could be on the way.

Amongst the best two year fixed rate mortgages currently on offer are a deal from The Co-operative Bank at a rate of 2.95% for borrowers with a 25% deposit, and a deal from HSBC at 2.99%, requiring a 30% deposit.

For borrowers looking for a variable rate mortgage deal for term, a rate of 2.29% is available from first direct which requires a 35% deposit, while ING Direct offers a deal at 2.84% needing a 25% deposit.

Find the best mortgage rate - Compare best selling 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 Any products featured may be withdrawn by their provider or changed at any time.